I was leaving church yesterday when someone approached me in the parking lot and said they needed to talk to my about insurance. This was not somebody I insure and I really don't like talking insurance at church. I tried to just give them my business card and get on my way (I have a problem with people trying to sell their wares while at church, but that's just me) but they wanted to talk.
They quoted a friend who said I "was really good" but they had a quizzical look on their face as they said "but I've never heard of your companies."
I hear that a lot.
Why?
Well, Allstate spend approximately 500 million a year advertising (
http://www.chicagobusiness.com/article/20110625/issue01/306259984/allstate-misses-the-turn-as-rivals-reinvent-auto-insurance) I imagine Gieco, Progressive, State Farm, & Nationwide are in the same ball park.
Let me explain how insurance works. For every Dollar that a company brings in they have to pay for expenses and claims and have something left over for a profit or they get skewered by their stock holders or go out of business. So, were does that advertising budget come from? That initial dollar, but they still have to pay to run the business, underwriters, janitors, adjusters, electricity, etc. Guess what the biggest expense an insurance company faces? Claims, industry wide about 65% of revenues in a good year. Wonder where that 500 mil is coming from.
One of my companies , Auto-Owners (
http://www.auto-owners.com/) feels they can afford to pay 68% on claims because they don't have that big advertising budget that the others do.
So, do you want to pay for Dennis Haysbert and Mayhem or do you want your company to have more money left over for claims?
As we've told you before, Cline Hall Agency is proud to be an "Endorsed Local Provider" of Dave Ramsey. Many of Dave's biggest lessons come from following his "Seven Baby Steps", which explain seemingly simple steps to put ourselves and our families on sturdy ground when dealing with our cash flow and/or debt. The first baby step Dave drills home is having $1000 in your "Emergency Fund" bank account. Have you taken this first step? Now, this can't be in your checking account where the Bon Jovi tickets suddenly become an emergency, or Valentine's Day last minute plans drain out the $1000 quickly. This account is for emergencies more so along the lines of your sudden need for new tires, or a trip to the dentist which isn't covered under you health plan. Or maybe even an unexpected accident, and the $500 deductible you'll need to pay to fix your car.
