Eric: Well, good morning, everybody. My lovely assistant Chris is handing out some envelopes because we’re going to do something a little exciting today, sort of a little put you on the spot. Bring you in. Who has envelope number one?
Mark: Is this a one?
Eric: That is a one. It’s a Roman numeral one. Well, you are just the perfect person to receive envelope number one. So, Mark, would you please open the envelope you’ve never seen before, and open it’s contents. He is so excited. This is right up his alley.
Mark: There’s no drugs?
Eric: No drugs. No white powder. Stand up please.
Mark: Read the following as the Queen of England. We flow coverage with Geico, and it costs $300 less than yours. We are canceling the policy.
Eric: Thank you, Mark. Yes, that was the Queen of England. So, thank you. Well, and in case you didn’t understand, I will interpret for you what the Queen of England just said is that she looked at her policy she had with this agency, and said, “Huh, I’m going to shop around because I’m paying outrageous money,” because she has too many speeding tickets, “and I found it for, whatever, $2,300 over here; I’m going to move to Geico.” And I was flabbergasted because it’s 40% less than what she was paying. I said,
“Really?” And I said, “Okay, I’ll cancel it.” But it’s 40% less.
It seems a little, I mean, doesn’t it seem unrealistic to you? 40%? Because I can quote Geico, I can’t write it, I can quote it, I have my system. I can quote State Farm and Geico and Auto Club, so I kind of have a general idea of what the market is out there, and I know they’re not 40% cheaper than what I had. They’re generally about 10 to 20% more. So with this person, and the point I’m trying to make is sometimes self diagnosis, like, hmm, I get that really deep cramp in my gut, I’ll just take an Advil and I’ll keep moving on with my day, you know, self diagnosis, it can lead to a little malpractice, and you can have yourself a little problem.
Same thing in the insurance world, there are licensed people that kind of know numbers, things like that. Some people will throw you to the wolves and not really give you good coverage, some people will spend time with you. That’s what I do, and I do that on purpose so that I make sure that you have the coverage that’s good for you. So with this person, I actually had my assistant call Geico, and had all the data she had, we changed the names, changed address, it’s basically the neighbor’s house, same zip code, and just said, because I wanted to know, I lingered for months, well, it wasn’t a month, it was about four or five weeks, just lingered, and said, “I need to know what Geico really charged this person.” And there may be a couple of discounts here and there that I wasn’t aware she threw in there, and it was $600 more than what she was paying with me. Exactly. Well, because she was buying a six month policy she thought was an annual policy.
So I said, and she’s a great client, I have her business, and her work comp, and her auto and home, been insuring her for 10 years. I said, “You need to stick with your wholesale business. Not the insurance business.”
With Geico, it’s really self, you plug in everything into the Geico thing, spits it out, okay, I’m done. Cancel, I’m in, Geico, boom. And she cost herself $600 more per year. So, anyway. So I’m dealing with that right now. Okay. Envelope number two. Two.
Business Growth Innovators Member: Oh, it must be Sally.
Sally: I pay $1,600 a year, more policies are just too expensive.
Eric: Okay. Sally was a snotty teenager, so. But this client wasn’t a snotty teenager, it was a 30, actually, it was a 27-year-old single guy, who happened to have a DUI about six, seven years ago. So he’s out of the mandatory reporting with the DMV, but still, you get a no good driver for 10 years from the date of the infraction. So, anyway, so this guy said, “Hey, I’ve got my house here in Costa Mesa, I’m buying three investment properties in Bakersfield, write my auto insurance.” Okay.
He goes, “I want 100, 300 coverages.” I’m like, you really should have more, because you’ve got all this equity. All these investments you’re putting in. “Nope, just 100, 300’s good. I got this DUI thing, I don’t want to pay too much.” Okay. Boom, boom, boom. Discounts because of all the other stuff. Here you go. Which was like, oh, I think it was about $2,200 a year, right around there. And he’s like, “Oh my gosh, I’m paying $1,600 with Farmers,” which is the Bristol West policy. I said, “Really?”
So, similar scenario to scenario number one. So he said, “Yep, $1,600.”
“Are you sure?” He goes, “Oh, I’m positive.” Okay. So, I called a buddy of mine that I still talk to, he’s a Farmers guy. I said, “Hey,” because we broached this again, because it came up that he forgot to cancel his Farmers home policy. So I was in danger of losing my discounted heavily home policy that I had written with him in Costa Mesa. Like, uh oh, I’ve got to do a little snipering here, so I called my buddy, say, “Hey, get my a Bristol West quote for this guy.”
So I had him do a 100, 300 quote, with Bristol West, all of that, and it was about three grand, like $3,200. And I said, okay, put in the home discount, put in every discount you possibly can. Like I’m an engineer and everything else, he goes, “Okay, it’s about $2,800.” So I said, “Okay,” so I sent that to my guy, I said, “Something’s wrong, I’m missing something here, because here’s the quote I got. I’m matching the coverages that I wrote with you that you didn’t like. You said you were paying way too much, here it is. It’s $1,200 more per year. I’m missing something. If you can, send me your Bristol West stuff.”
Of course he’s like, “Well, it’s $1,600, I’ve got great coverage.” “Just send it me, you know, send it to me.” So he sent it to me. Here is what he had. So, everyone know what state minimum is in California? 15, 30, and 5?
That’s what he had. 15, 30, and 5. Guess how much uninsured motorist coverage he had? He had no towing, no medical, no, all the stuff I gave him that he asked for, he said, “I want 10,000 in medical coverage,” which is anything having to do with getting anything out of your car.
Yeah, and I’m scratching my head, and I was like, you’re a smart, this guy is smart. He’s much smarter than I am, you know, Mr., you know, engineer guy, four point whatever GPA in college. But see, that’s the thing about insurance. You could be the smartest guy in the room, but what happens to do with insurance thing, it really dumbs a lot of people down. And I don’t mean that offensively, but it’s sort of like looking at this chart, your eyes go, you know, the chart that Crystal handed out. The eyes just go crosseyed, and in some people, I’ve talked to PhDs, and MDs, they just can’t speak insurance speak. Because they’re great in their own little world, they can solve your brain issue, but when it comes to the simplicity in my world of insurance, what I think is simple, it’s like, uh.
So, again, we’ve got to stay away from the self diagnosis. So, we’re writing that policy again. Yes. Envelope number three.
John: Our coverages are great, and we have great rates. Screw you, CIA. Was that insurance-speak?
Eric: He did improv. He went off script. That was tough motorcycle guy. Good job, John. Good job. Just kidding. So what I found out there is that a lot of folks, what I found is when I call and I interrupt someone’s world and life, and whatever they’re doing, and say, “Hey, let me quote your insurance,” it’s sort of like, the knock on the door, “Hey, would you like to buy something or other?” And it’s like, you’re interrupting their world. And I know I interrupt the people’s world, and the last thing I want to do is pull out the coverage, get the VINs, oh, I’ve got four people in my family, what’s your license number again? I know that. But a lot of people are so under insured, it’s crazy.
Had a guy in my office yesterday. “Hey, I’ve got great coverage, just quote me.” And he has business, he has a street sweeping job, but the parking lot sweeper guys at 3:00 in the morning when you’re up getting the eggs for your 5:00 a.m. Rocky thing, you know? Chugging them raw? But he has a business, two of those trucks, he’s real successful, he’s making about $200,000 a year, so he’s doing really, really well. He’s got contracts with Walmart and all these big, big malls, he drives all over. He’s doing great.
So I said, “Let me check out your policy.” Looked at the truck, million dollars, because that’s what everybody asks for. But guess what the broker gave him for uninsured motorists? 15, 30. Like, dude, what if you’re driving at 2:00 in the morning and some dude runs a light because they’re plastered and drunk? You’re the business owner, who is going to drive your truck for you? You have $15,000 in coverage if that guy’s uninsured. 15. He’s making $200,000 a year driving his truck. What if he can’t work? He’s got to pay someone now $40, $50,000 to do that. Same thing on his personal car. He had Auto Club. Has. Well, it’ll be had in about two weeks. And he has 25, 50 in coverage, and I told him, “Look,” it’s individual business, so he has it incorporated, “So you’re making $200,000 a year. Your business with your contracts is probably worth about half a million bucks, give or take, and you have $25,000 in coverage.” And did I eat those two minutes up already?
Business Growth Innovators Member: You’ve gone over 10 minutes
Eric: Well, this is really important. Well, anyway, but the point is, the point I’m trying to make for all of you, the people you love, the people you know, clients, insurance is a funny little animal, and everybody has the best coverage in the world, the best agent in the world, the best company in the world, but just let me take a look at it. And I’ll either confirm it, or say, “Your coverage sucks. But I can do so much better, what have you got to lose? You know, what do you have to lose on the money side and the coverage side?” Nothing. Because you have all of it to gain, or just know you’re in a great spot. Anyway. I’m passionate about that stuff, and thank you for your time.
Eric donates a lot of his time to AYSO – refereeing soccer, Boy Scouts of America – Assistant Scoutmaster, and his church – playing guitar, bass, singing, and just making noise in general.