Do I have enough insurance?

How would you (or your staff) answer that question from a client? Hopefully you have given this issue some thought as your answer can have some significant consequences if a problem develops down the road.

Let’s look at the question from the perspective of the client. They are trying to justify that the amount of insurance (specifically the limits they have secured) are going to be enough at the time of a claim. Can you, as the agent, truly answer that question with any degree of certainty? Let me also ask you, is the client really expecting an answer they can rely on? I don’t believe so. However, if you give them an answer such as “you have more than enough” and they have a claim that exceeds their limits, your response could be very damaging to your defense when a lawsuit shows up at your office. And it will show up at your office.

There is a good chance that the client knows that there is no way to 100% accurately predict that their current limits are enough. Unfortunately, it seems that every day, the world we live in is redefining the “worst that can happen”.

Some agents provide benchmarking data which has value but how much can those numbers be totally relied on? They may provide insight into what other comparable industry specific firms are buying but that is certainly no guarantee that is an adequate limit for your client.

So how should you answer the “do I have enough insurance” question? Asking the client to describe “what is the worst that can happen” might have some value but there is a good chance that the “worst case” is so far-fetched that the client does not see it as a potential realistic scenario.

It is probably best to advise the client there is no way for you to state that the amount of insurance they have will be enough at the time of a claim. In actuality, for the client to purchase the limits they may need for the worst-case scenario may not be possible as the additional cost may have some serious business implications. It is a trade-off of cost versus protection.

The one response I would not suggest you provide is “you have more than enough”. You may be thinking why would anyone say that? Believe me, it happens and it may happen more than you realize. I am very familiar with one CSR advising a client that was looking for a quote for higher limits that the limits they had were plenty.

You can count on this question being posed to any of the agency staff that deal with clients on insurance related matters. This would probably be a good topic to discuss at your next agency staff meeting. You may find out the issue is more prevalent than you thought.

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