Why Should I Change if I Like my Agent?

Industry: Steel Fabrication Exposure: $10 million

Coverage Benefit: Over $2 million in Additional Coverage

Savings: $50,000

Insurance Problem

The company’s management was hesitant to go through the review process because the owner had known his agent for 26 years and was comfortable with their relationship.  The owner thought their agent knew them so well that it was a waste of time to meet with Swingle Collins & Associates.  Ultimately, management did let us do a review of their current policies to justify their belief that the company already had adequate insurance.

Risk Management Solution

The first meeting was under an hour in which we received the company background information and toured the operations.  During the second meeting we revealed numerous gaps in coverage in the property, liability and auto policies.  The property limit in the policy was $3.2 Million when there was actually $5.3 Million on site.  The liability policy had misclassified an area of their operations giving them an exposure rate of $6.07 when it should have correctly been rated at a level of $4.64.  The auto policy omitted several autos and included autos that were no longer owned by the company.  The auto policy also had incorrect VIN numbers and incorrect information for the scheduled drivers.  If the fabricator endured a fire, liability claim or car accident, it would have caused an extreme financial hardship that could have caused it to fail.

Results

The management team was surprised at the improvements we were able to make to their coverage.    They were disappointed that their loyalty to their agent was not returned with adequate insurance policies.  Swingle Collins & Associates was able to increase the property values by $2.1 Million to the correct level.  We were able to correctly classify all of the liability risk exposures and still lower the premium.  Finally, we were able to properly write the auto policy by adding the autos that had been neglected, deleting autos that were no longer owned, and identifying the correct information for all autos and drivers.

Not only did we correct all of the actual coverage issues adding to the revenue exposure, property limits, and autos, but we were able to do this while saving the insured over $50,000.  The fabricator’s premium went from $125,000 to $75,000.  This was a perfect example of an insured being set in their ways and having a trusted long time agent who had become complacent.