Ways to keep your insurance costs down

Insurance costs are not only more expensive these days, many Canadian businesses are struggling to renew their policies or get insurance at all. If you’re operating a business, especially one that’s been hardest hit by COVID-19, chances are you’re racking your brain trying to find ways to cut costs, recover and survive, and wondering what you can do about  your rising insurance costs. That’s because, in addition to other impacts, the insurance industry has been struggling with hard market conditions for a few years now.

What’s a hard market, anyway?

During a soft market there’s lots of competition between insurers and therefore premiums remain the same or decrease. It’s also easy to get coverage for a variety of different risks. Even before COVID-19 struck, the insurance industry found itself in a hard market cycle, which means insurers struggle to reach positive financial results and premiums go up for even the best in class risks, there’s increased underwriting scrutiny and new coverage limitations and higher deductibles apply to every policy renewal.

In addition to a hard market, there are a number of other factors causing insurance premiums to rise, like low interest rates and regulation, for example. With no end in sight yet to the hard market and other impacts, and add to that a global pandemic, you’ll need to be prepared to pay more for your insurance. Thankfully, however, there are some practical steps you can take to help control your  costs.

4 ways to keep your insurance costs down

 
 1.     Invest in risk management
Taking steps to minimize risks means controlling your costs. Ways to manage risks  include:
 o  Avoiding risk
 o  Preventing & Mitigating risk (examples include appropriate maintenance for your assets, fire and water damage prevention etc.)
 o  Transferring risk (Example: analyzing your contracts carefully for opportunities to avoid and transfer risk)
Know that some insurers are just not willing to cover some classes of business and    property, in which case you’ll face higher deductibles.
  
2.     Be a desirable client
How your broker presents you to an insurance company matters, so it’s important to be able to show your business as a better risk than most. If you’re renewing with your current insurer, the price is likelier to stay reasonable for the loyal, diligent and reliable client. Talk to your broker about a strategy to obtain the best terms from the different insurers and respond proactively to business loss control recommendations.
Know that underwriting decisions take longer than ever, so be patient as your broker tries to negotiate the best deal for you.
  
3.     Claims history matters
Try to keep your insurance for catastrophic loss and rather pay for small property or vehicle repairs yourself, if possible, instead of claiming from your insurance.
  
4.     Monthly premium financing
You can protect your cash flow with a reasonable monthly premium financing plan (available for all forms of insurance except Directors & Officers Liability). Talk to your broker about the different options. Also ensure you diligently pay your insurance premiums. A recent study revealed the biggest reason for higher auto insurance premiums is clients having their insurance cancelled due to non-payment. Having your insurance cancelled for missing payments means you’ll always face higher rates. 

These are a few ways that will help you to keep your insurance cost down. For more details you can contact team A-Kan, we’re always there to hear from you.