Choosing the right broker can be the most important thing you do to assure the best coverage at the best price.
A previous article briefly described three methods of choosing a broker; a) the shotgun approach, b) providing a test by assigning markets to several brokers, and c) hiring a single broker through an interview process.
The shotgun approach of calling as many brokers as you can find and seeing who comes back with the best quote provides a consistent scattershot result. Sometimes you get lucky. Usually both broker and buyer end up frustrated and unsure what the best result could have been. The quote doesn’t necessarily go to the best broker. It goes to the broker who can get to the market first, regardless of the quality of the quote request and the information provided to the underwriter about you.
Assigning markets to several brokers ultimately puts you in the position of being the aviation insurance expert. In addition you will have several brokers telling you why you should buy their product rather than a trusted adviser helping you make the proper choice. This technique works best for municipalities and quasi government entities like aviation boards who have professional risk managers that are required to get competitive quotes to bring to the decision making body.
Interviewing and hiring a single broker to act as your aviation risk manager has, over the years, produced the best and most consistent results for the experienced aviation insurance buyer. These buyers will tell you that, rather than spending your time and effort looking for the best quotes, you should interview and hire the best broker that will work for you.
Below are ten questions you might find helpful when interviewing a prospective agent or broker.
1. Does the prospective broker have a thorough knowledge and understanding of the aviation insurance, the marketplace, policies and coverages? You are hiring an expert in a very specialized field.
2. Does the broker have direct access and a strong relationship with all markets? Using a local, non aviation agent with whom you are familiar is common. However, depending on the complexity of your operation, having a direct relationship with an aviation specialist will assure you have access to the full market, not just the markets the local broker has access to. It will also improve communication between you and the underwriter, assuring that the underwriter is getting the best information, communicated in the best way to provide the best possible results. This communications process is critical, especially when a problem, claim, or special need arises.
3. How well does the broker understand your aviation operation? Your broker should have a strong background in aviation. Just being a pilot is not enough. The more he knows about your operation and the application of aviation insurance to that operation, the better he can work with the underwriter to get the results you want.
4. Is the broker willing and able to handle all of your aviation insurance needs? Some aviation insurance such as physical property and workers comp require a greater amount of time and effort on the broker’s part with a lot less return in premium and commission. For this reason, some brokers prefer to cherry pick. A full service aviation broker should provide these coverages as part of his service, regardless of the return on his time. He should also be willing to work constructively with you and the underwriter on any difficult issues to a mutually acceptable solution.
5. Does the broker take the time to explain the process and coverages as well as how they relate to your operation? Does the broker offer suggestions and methods to improve your operation to put you in the best position to get the results you want? Does he offer explanations and insights into the effects of safety and loss control for reducing the cost of insurance or improved policy language?
6. How accessible is the broker and his staff? Do they return your calls or emails promptly? Do they have an informative and interactive website? Can you reach them on the weekend or during an emergency?
7. Does your broker make you feel like a valued client? A broker should be there to serve you. If you treat them like a trusted adviser, they should treat you like a valued client.
8. Does the broker have sufficient office support to properly service your account? A successful broker may have several hundred clients. A successful agency may have several thousand. They should have a professional staff of knowledgeable aviation specialists to provide timely, accurate service, from invoicing, processing applications, and certificates of insurance to taking the time to fully answer your questions and concerns. Visit them at their office if at all possible.
9. Ask for references and check them out.
10. Do you like the broker as a person? There are too many other quality choices to work with a difficult person. Life is much sweeter when working with people you enjoy being around. That works both ways.
The underwriter, not the broker, prices your risk. Providing the underwriter with the best and most accurate information about you and your aviation operation is one key to getting the best value. Establishing a strong, trusting relationship with your broker allows him to best represent you in the marketplace. If the underwriter is forced to establish pricing based on incomplete information, you can bet the number will gravitate to a more conservative figure (higher premium). Remember, whomever you choose, the broker should act as your advocate in the marketplace.