From Overpaying to Savings: How We Transformed a Client's Insurance Program
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Backstory
Imagine paying double for insurance—and not even knowing it. This client came to us through a referral from another satisfied customer. They were previously insured through a captive insurance agent, and during our initial meeting a few years ago, we uncovered several significant issues:
- Lack of Engagement: Their renewals were almost non-existent. Premiums consistently increased with no explanations or guidance on managing these costs.
- Inefficient Policy Structure: They operated two distinct business entities—one for a franchise and the other for their own business—sharing assets and employees. Instead of consolidating coverage, they were issued two separate Workers' Compensation policies for the same payroll exposures, resulting in being charged double.
- On top of this, an experience modification factor of 1.38 was applied to both policies due to prior claims.
- Outdated Coverage: Key aspects of their policies had not been reviewed or updated for years. Property insurance limits, equipment values, and other critical coverages were inaccurate and insufficient.
Solution
We took a consultative approach, spending time understanding their pain points, safety protocols, and business goals. Here’s what we accomplished:
- Comprehensive Marketing Effort: As an independent agency, we marketed their business to multiple carriers to find the best fit—a luxury captive agents typically lack.
- Property Coverage Improvements: We nearly doubled their building coverage from $670,000 to $1.2 million, addressing a significant underinsurance issue. (Yes, they were nearly 50% underinsured.)
- Enhanced Coverage: We added Employment Practices Liability and Cyber Liability, critical protections for modern businesses.
- Policy Cleanup: We removed vehicles no longer owned or used, eliminating unnecessary expenses.
- Workers’ Compensation Overhaul: By submitting an ERM-14 and exploring multiple scenarios, we combined the two Workers' Compensation policies. This eliminated the double charges for shared employees and prior workplace injuries, significantly reducing premiums.
The result? The client’s insurance program was transformed, and they became our client on the spot.
Renewal Process
The following year’s renewal was much smoother since we had already addressed the major issues during the initial transition. Adjustments included:
- Fine-tuning payroll estimates.
- Establishing a separate Business Auto policy for a driver with an "active" driving record who couldn’t be insured under the primary policy.
Key Achievements at Renewal
As we entered their second renewal, we achieved additional milestones:
- Workers' Compensation Savings: With an improving experience modification factor, better performance (fewer claims), and added safety credits, we remarketed their Workers' Compensation policy. By placing it with Retailers Insurance, we achieved:
- 25% Premium Reduction: Thousands of dollars in savings.
- Full-Payment Discount: An additional 10% savings for paying the annual premium in full.
- Increased Employer Liability Limits: Boosted to $2 million.
- Enhanced Cyber Liability Coverage: $100,000 included through the Michigan Retailers Association.
- Expanded Benefits: The Michigan Retailers Association also offered credit card processing services. At our suggestion, the client explored this option and reduced annual costs in an area outside of insurance.
- Additional Premium Savings: Another 10% savings on Workers' Compensation premiums was achieved through association benefits.
Conclusion
This client’s success story highlights two crucial lessons:
- The Value of Due Diligence: Regularly reviewing your insurance program ensures you’re not overpaying or underinsured. This process is best done with an independent agent who can navigate the market as your expert buyer of insurance.
- Even if you stay with your current agent, update your policies to reflect changes in sales, payroll, drivers, equipment, and property values to avoid gaps or overspending.
- The Right Agent Makes a Difference: Partnering with the right agent can turn renewals into opportunities for savings and improved coverage—not just a stack of papers with higher premiums.
Ready to see how we can transform your insurance strategy? Contact us today for a personalized consultation.
Don't let your business insurance costs get out of control —act today!
At Top O' Michigan Insurance Solutions, we're here to help you navigate the insurance marketplace. Our team can guide you toward risk management strategies and coverage solutions that work for you. Contact us today for a personalized insurance review and keep rising costs from taking you by surprise.
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Now you’re either currently investing a lot of money into your insurance policies or getting closer to making this decision. We don’t want you to make any mistakes with a decision of this magnitude. So instead of basing this huge decision on a quoted number on the computer screen or a piece of paper – we thought you’d like to know that you can work with one of the knowledge members of our team so that you can become well educated on your insurance before buying.
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About the Author
Tyler Bartosh (Connect with me on LinkedIn)
A third-generation insurance agency owner and agent since 2007, Tyler Bartosh is the consummate “insurance geek,” using his passion for business, knowledge of insurance, and advocacy for clients to help serve as the expert buyer of insurance. He helps businesses implement risk management strategies that save both time and money, so those resources can be put towards other initiatives in your company.
Away from his career in insurance, he enjoys spending time with his family & friends, volunteering throughout the community, golf, fishing, snowboarding, hiking and virtually anything outdoors and traveling to see live music. Tyler has a wife Emily (who is also an underwriter in the insurance industry), their dog Lucy and a baby girl, Sophie Constance.
About Top O' Michigan Insurance Solutions:
At Top O’ Michigan Insurance Solutions, we pride ourselves on using our skills to provide clients with competitive pricing, stability and understanding, and peace of mind. With seven locations throughout Michigan and 24/7 client access, our team is your 'expert buyer' of insurance for home, auto, farm, boat, motorcycle, business owners, workers compensation, bonds, life and health, employee benefits and more.
We will provide unparalleled and caring service to our clients through our knowledgeable staff and give back to our employees, agency, industry and our communities. Part of our mission is to give back to the Michigan communities we serve. This is something we take action on through We Care and you can learn more about our community outreach at TOMIA247.com/WeCare.
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Disclaimer: This Blog/Web Site does not provide insurance or legal advice. This site is for educational purposes only as well as to provide you with general information and a general understanding of insurance, not to provide specific legal advice or specific contract advice. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute a client relationship.
The information on this Blog/Web Site is not intended to be a substitute for professional insurance or legal advice. Always seek the advice of a licensed agent in your state pertaining to insurance and legal issues.
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