Insurance 101:
               Managing Uncertainty

                         Critical risk and insurance basics to know "before something happens."







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Before You Go Out To "Bid"

#1 Thing To Know

At an auction, it's the bidding that pumps excitement into the event. It's the thrill of the chase and the victory of a win!  When you buy or sell a house, the final price is determined by "bid." The offers are spread out on the table and the seller chooses the one that best meets the need. So if bidding works at an auction and in real estate, why not bid insurance?

On the surface, insurance can appear to be a commodity...something that is easily bid out. Slogans like "Save 15% in 15 minutes" give the impression that all insurance is the same except for price. Let's face it, we would love it if insurance was that easy. But insurance is complicated and typically not fun which is why we depend so much on the trust we have in our agent to protect the things that are important to us.

At the same time, businesses that must provide bids to generate revenue for themselves tend to expect the same when it comes to their insurance. A contractor who bids for work all day long is likely to expect better insurance pricing if he goes out to bid.

In reality, the process of producing a proper insurance plan is more like preparing a tax return than bidding a plumbing job. The insurance process coordinates historical information, classifies current operations, and projects the impact of potential future risk exposures to protect the consumer from unanticipated, potentially devastating losses.

Bidding Strategy

Preparation is the key to successful insurance shopping. Before you go "out to bid," you'll want to make sure your insurance will be priced based on your lowest possible cost of risk. You'll want to have caught the mistakes, eliminate the overcharges and reduce your risk of injury and claims cost. Underwriters considering your insurance will want to see an excellent explanation for past results and a compelling "going forward" risk reduction plan.


Prep Strategy 1

Start now.

Renewal time is the wrong time to make corrections, get educated, and change things. In fact, waiting for renewal will guarantee you lose one year of potential savings. Six months before renewal is not too soon to start.

Prep Strategy 2

Trend claims.

Loss runs do not tell us enough to stop claims. We need to trend where, when, how and why these claims are happening. When we review the trends related to our insurance losses, we know exactly where to start to eliminate the biggest risks immediately. 

Prep Strategy 3

Do an audit.

Ask your broker to audit every aspect of your insurance program and provide a written list of comments and recommendations. Now is the time for them to ask you questions, get updates, correct misunderstandings, and offer up improvements. 

Prep Strategy 4

Get confidence.

No confidence in your current insurance agent? Give the audit opportunity (see #3) to your next-in-line insurance broker. Or just contact or call one of us here at VANTREO. An audit is a great way to experience us in action. 

Done with this chapter? Test your knowledge!


Much like a good CPA coordinates current, historical, and projected information to minimize taxes, the best insurance professionals work with their clients to create a risk reduction plan that not only protects them but minimizes insurance cost.  

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but designing and implementing a proper insurance plan is really much more like preparing a tax return...and yet different. The most effective insurance plan also includes ongoing risk reduction efforts that not only protect you but also minimizes insurance cost.

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