Buying medical malpractice insurance can be a time-consuming, frustrating process. There are many different companies to choose from, policy types to understand and coverage nuances that can make it difficult to really know if you’re getting the best coverage at the best price. So, often doctors will work with an agent to help them compare options in the market. And the more agents you work with, the more options you’ll get – right? Well, today we’re going to show you why this is actually NOT the best approach and show you the 4 problems with working with multiple agents. Additionally, we’ll show you how you can streamline your quote process to ensure you’re getting the best options as quickly as possible.
So there are 2 different types of agents that you can work with for malpractice quotes – direct agents or independent agents. And we’ve touched on this topic in previous episodes, but let’s do a quick review together… starting with Direct Agents.
A direct agent works for a specific insurance company. Their job is to sell insurance for the company they work for. They are captive agents and can only offer one malpractice solution from one company – the one that they work for. So, if you work with a direct agent, you’re only going to get 1 quote. A doctor or group would need to contact multiple different carriers on their own in order to get other coverage options to consider – which can be a time-consuming and tedious process.
Independent agents, on the other hand, do not work for any one company. They represent multiple companies, which gives them the ability to shop around and find the best fit for you. Independent agents aren’t beholden to any one company, which means that they are working for YOU, not for the carriers. Having access to multiple companies benefits you because it drives competition, resulting in lower costs.
Insurance policies aren’t like typical consumer products, where the same item can be sold for a different price through different means. Rates are filed with and regulated by the Department of Insurance in each state and carriers do not have different rates for the business they write direct vs. through an independent agent. So… a direct agent isn’t able to offer a lower price than an independent agent could. The company has to issue the same quote to either type of agent.
Furthermore, many malpractice insurance companies don’t even sell direct – they only work though Independent Agents, so even if you were to call on them, they would refer you out to one of their appointed independent agents to provide you with a quote.
Since the rate is the SAME whether you work directly with the company or through an independent agent, most doctors prefer to work with someone NOT affiliated with a carrier to get an objective, fair review of all available options.
Ok, so now you’ve decided that it’s best to use an independent agent to help you with your malpractice insurance, so you start doing your research and call a few different agencies to get the process started.
You talk to each of the agents about your coverage needs and ask them to get you quotes.
Why not have multiple agents shop the market for you and have the best man win?
Unfortunately, it’s not that simple. There are several reasons why this approach not only doesn’t work, but it can actually HURT your chances of having the best quote options to consider at renewal.
When a practice administrator or doctor asks multiple agents to go to market for them, it instantly complicates the purchasing process, and you lose the leverage that you may have had by working with just one person.
Insurance companies can only issue 1 quote for a particular insured at a time. And they will give that quote to the first agent that brings them the business. So… they won’t give the same quote to multiple agents. They will only issue it once, to the first one in the door. And that brings us to…
Problem #1 – Agents trying to block the markets
When you work with multiple agents, it can quickly become the “wild wild west”. It’s every man for themselves and agents can block markets, which means they try to get the first submission in the door so that no other agent can approach that company on your behalf. Agents do this to control the market and to make sure they are the only ones that you can work with.
So, what happens if you decide that you don’t want to work with that particular agent anymore? But they already have your quote request pending? In that case, you’ll need to request an Agent Change, which can allow you to switch the agent that is representing your business – but it takes a minimum of 10 days, which significantly slows down the quote process for you. It’s overall very clunky and leads to frustration and sometimes political jockeying between agents and carriers – which can be a real mess to deal with.
Problem #2 with working with multiple agents – Agents with misguided intentions
When multiple agents are fighting for your business, it becomes all about getting the sale instead of doing what’s best for you. Let’s say, for example, that you’ve engaged with 3 different agents. The first agent, we’ll call him “Joe” has quotes from Carrier A and Carrier B. The second agent “Bill” has quotes from Carrier C and Carrier D. The third agent “Nora” only has a quote from Carrier E.
Each of these agents are going to do their darndest to try and convince you that their markets are the best fit for you. They can only represent the 1 or 2 carriers that they’ve received quotes from, so they can only “win” your account if you select one of the carriers that they bring to you. When this happens, the agent is simply looking to become your broker of record – they’re NOT focused on helping you truly make the right choice for your malpractice coverage. For example, if Nora really has the best policy option, Joe and Bill are likely NOT going to tell you that. They’re going to try and sell you on their options, instead.
It can be incredibly confusing for doctors to really understand which policy is the right fit when you have several different people trying to sell you on their options.
Problem #3 – Working with multiple agents causes unnecessary extra work for YOU
Working with multiple agents takes a lot of time. You will have to manage each agent… providing them with the applications, a copy of your CV, previous insurance documents, you’ll have to answer underwriting questions and go back and forth when they need additional information. You’ll have to sign the necessary forms, review the quotes and ask for refinements… all while trying to make sure it’s a level playing field for everyone and ultimately trying and determine which broker and quote are best. It is an incredibly labor-intensive process that typically does not give you the result that you want.
Whereas, working with 1 agent can streamline everything for you, by only having to do these things ONCE and then the agent can manage all of the quote requests with the various companies and underwriters, ensuring that you’re not being burdened with any unnecessary work.
Problem #4 – You lose your leverage
When insurance companies know that one agent has control over the decision with their client, they know that they must give it their best shot to be considered. They are more likely to give quick, aggressive pricing and they put their best foot forward to try and make sure they stand out from the other carriers being considered.
When multiple agents are representing multiple carriers, you lose this leverage and the carriers are generally less aggressive and a bit slower to respond. The reason for this is because they know their chances of winning the business are lower because of the complexity of having so many parties involved.
When there is only 1 agent quarterbacking ALL of the quote requests, carriers generally respond more positively – which means a better result for you.
The best course of action is to find and select 1 agent to represent your business when you go to get quotes for malpractice insurance. The right strategic partner for your practice will bring the knowledge, service, and resources that you need to get a simple, objective overview of the malpractice market – with no biases or desperate attempts to place you with one carrier over another.
Do your homework to find an agent that specializes in medical malpractice, has experience and knowledge in your state/region, and has access to the best carriers available. You should be able to trust your agent to represent you well, understand your coverage needs, provide ongoing support, and help you find the insurance carrier that is the best fit for you – while ensuring that you’re not overpaying!