Why Your Insurance Agent Needs Your Premium Information

Hey there, it’s David Carothers from Florida Risk Partners. Today, I’m diving into a question that’s probably been on your mind, whether you’re navigating the waters of personal or commercial insurance: Why does your agent keep asking for your target or expiring premiums?

Why Your Insurance Premium Matters: The Truth About Navigating the Current Market

Let’s get real—I get why this might make you raise an eyebrow. You might think it’s a tactic for underwriters to sharpen their pencils or for agents to outmaneuver your current one. But here’s the thing—your current agent already has those numbers.

We’re going through the hardest market the insurance industry has seen in decades. There is no time to play games, especially when your coverage is up for renewal or you’re hunting for a new deal. So, why the nosiness about your premium? It’s not about cutting corners or gaining an upper hand.

Cracking the Code: Understanding Your Target Premium

Here’s the breakdown: understanding your target premium is crucial, not for the sake of sneakiness, but to ensure your account fits snugly within the underwriter’s “profitability box.” It’s like trying to hit a bullseye in the dark without your expiring or target premium. We’re trying to align your loss history with the potential profit from your premium. This equation helps underwriters calculate your “loss ratio”, a critical factor in determining if your account is a viable risk.

Imagine your expiring premium pegs your loss ratio at 120%. In layperson’s terms, you’re asking the insurer to embrace a loss right from the start, shelling out more claims than they collect from you. Clearly, that isn’t how to run a business. The goal is to find a sweet spot where the premium reflects a manageable risk, hopefully with a little room for profit.

Equipping Agents with Essential Insurance Intel

I’m laying it out here because I want you to know there’s nothing underhanded about this process. It’s not about edging out competition; it’s about equipping agents with the same intel your current agent holds. This transparency gives them a fighting chance to advocate for you, ensuring underwriters have a clear picture of what you’ve been paying versus what they’ve historically paid in claims. This approach helps everyone involved find a premium with which everyone can live.

Navigating Insurance Negotiations: A Dance of Understanding

Negotiating insurance shouldn’t feel like a tug-of-war where one side wins and the other loses. Think of it as a dance where both parties are partners, moving in sync to reach a mutual understanding. So, when asked for your premium information, know it’s a step towards securing the best outcome in a challenging market.

I hope this explains the “why” behind the question and helps you navigate your insurance journey more easily. Here at Florida Risk Partners, we’re all about clarity, fairness, and getting you the best possible results, even when the going gets tough.

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Grayson Carothers


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