At the beginning of the year, Coterie set an internal goal of having six licensed agents on our team. At the time, we had two. Now we have seven. I never thought I'd say this before but I am proud to be a licensed Property and Casualty Insurance Agent.
Admittedly, my insurance knowledge before Coterie was limited. I read my homeowner’s policy once and after going through it, my mind was swimming in uncertainty.
“I have no idea what I am actually covered for,” I said out loud incredulously after going through my policy docs.
I didn’t know the rules. And not knowing the rules gave me zero confidence. There’s good news, though. Insurance isn’t as impossible as it may seem at first glance!
As I’ve begun learning the rules of insurance, it has begun to go from a black box that I had no understanding of to highly-customizable but massive menu of options that can be molded to meet your exact personal or business needs.
It works on a massive scale because of the interconnectedness of the system itself. It is complex, there’s no doubt, but it’s like layers of rules that connect like legos to make it a self-contained system.
Lesson 1: Insurance Works Because It Is Big
While studying I came across a line that helped me understand the fundamentals of insurance:
“Catastrophic events like war and nuclear reaction or radiation are standard exclusions in insurance policies. If those perils were included, the cost of the policy premium would be unaffordable.”
Insurance is a complex system that’s bigger than all of us - and that’s how it works. It’s referred to as the law of large numbers. Transfer of risk between people or businesses - to another entity - requires rules, like mathematical principles, for it to work.
Lesson 2: Insurance is highly customizable to cover what might happen
Insurance starts at its most basic agreement - you pay me now and I agree to pay you later if something we said might happen, happens.
I think it’s safe to assume very few people leave their house in the morning setting out to get into an accident (if you do cause self-inflicted damage, you ain’t covered!). Most accidents aren’t as clean as a simple fender bender with minimal damage. Sometimes they involve many people, losses, and expenses.
Think about the mess if someone drove their car into your kitchen and hurt a family member! Then let’s say that accident caused a flood that led to water damage in your basement and you had to move out for two months. You’re talking property damage, medical bills, a short-term rental, and cleanup services.
Each of those loss types are defined so they can be looked at individually, then summed as part of one payment.
Lesson 3: Owning an insurance policy is not going to make you a profit
The point of insurance is to make people who experience a loss whole. This is called indemnification.
Unless it is a specific financial instrument like a Credit Default Swap, most insurance policies are designed so you don’t profit.
That’s fair, right? It might be annoying when you have to file a claim, but at least you have something to make you whole.
Don’t try or expect to get more - but absolutely expect to get what you’ve paid for (which is why it’s so important to understand what you’re paying for before you buy it!).
Lesson 4: What’s in your policy can vary significantly from another person with the same policy type.
Let’s say you just started a business and your landlord says, “You need a Businessowner’s Policy (BOP)” to sign a lease. Pretty straightforward request so you go out and get a BOP policy.
Your landlord also requires the same from her other tenants. But if you compared your BOP policy with your neighbors, there may be some major differences even if the name of the policy is the same. Maybe some have different policy limits, deductibles, coverages, or locations that cover their specific situation.
Understanding the menu of offerings available for businesses has revealed the degree to which some of my old companies were undercovered - not because I didn’t have insurance, but because the insurance I had was incomplete given my needs.
For example, a General Liability policy wouldn’t cover an in-depth financial analysis containing recommendations to a client - that would be covered by a Professional Liability policy. For years I didn’t know I was uncovered in the event I had been sued for “errors and omissions”.
I’m glad I know now!
So while it may take a little longer to explore the exact needs of your business, do it. After all, you’re in business for it to be sustainable, so don’t let a little time and an additional expense stop you from educating yourself.
So what does this mean for Coterie?
As consumers of insurance, we’ve probably had the same feelings and experiences you’ve had when buying insurance. Because of that, we’re intentionally building our products and customer service infrastructure with education in mind. Through content, data, and human interaction, we want you to have an outlet to feel confident in your insurance buying decisions.
This starts with how you purchase our products. When you come to our site, we hope it is a visually entertaining and educational experience. While you might not care about insurance after you leave our site, while you’re here our goal is to help you get the right coverage so you don’t have to think about it.
In the event you have a claim or need to speak to someone, our pledge to our customers is to ensure you are interacting with helpful and humble people. In a couple minutes of conversation - on chat or on the phone - we can help you think through your business’ needs and direct you to the right policy. No more wondering “what if” because you know you’re covered for the right things.
What would that peace of mind mean to you?