What you must know as an insurance buyer (and what insurance companies don’t want you to know)
Insurance guides

What you must know as an insurance buyer (and what insurance companies don’t want you to know)

An introduction from Kiv Insurance’s Founder, John Bernard Duler

Summary:

  • I am frugal and hate wasting money. I want to help you SAVE YOUR HARD-EARNED MONEY.
  • I am very experienced in the industry as a buyer and a seller of insurance products.
  • I don’t mind ruffling feathers. The majority of insurance companies are great, but there are some bad apples out there. I am not afraid to flag them so you don’t have to make mistakes.
  • There are “must have” insurance items and “useless coverage/already covered elsewhere” items. I will guide you through them.
  • There are some good and experienced insurance brokers. Others are just playing golf, while paper pushers back in the office handle the documentation. In other words, some add fantastic value; others bring nothing. You will learn the difference.
  • The goal of Kiv Insurance is to make you a smarter buyer ASSUMING you have to buy (and often, you should not buy insurance).

When was the last time you found useful and unbiased insurance advice on Google?

You have seen bullshit everywhere when you search something on Google. The social pressure to have an opinion and a lack of accountability lead to the mix of truth, half-truth and outright falsehood known as bullshit:

  • Top 5 insurance companies
  • Top cheapest companies,etc…

Look at the top three pages on Google: what happened to the greatest search engine ever created? Just now a pile of junk ads…

How do you feel about buying insurance?

Do you ask yourself questions such as:

  • How do you feel about buying insurance and not getting your money back, ever, if you have no claims?
  • Do you feel that insurance is too expensive? 
  • Where do you draw the line?

When you ask your insurance broker, the answer may be “yes, buy that coverage, and buy higher limits as well”. Think for a second: that broker is paid a commission of the premium you pay. Do you smell conflict of interest here?

It is like asking a lawyer whether you should sue and go to court. Since that lawyer is paid on an hourly basis, you know what the answer will be.

It is the same with a medical doctor advising you to “get additional X-rays”, “lab work”; then you read about how they make money as a % of the number of patients they refer to the X-ray facility or they are part owner in the lab.

Do you then turn to Social Media for “answers” (and therefore more ads)?

Social media made everything worse over the past 10 years: fake reviews, fake news, buying influencers, buying rankings, and bidding up words.

GEICO is the leading advertiser in the insurance industry, with a $2B/year budget. Progressive, State Farm and Esurance are way behind. Why is GEICO spending so much? Simply to replace the customers GEICO loses every year. If GEICO is such a great deal and if you save so much with GEICO, why does GEICO need to replace so many of its customers every year?

The worst results on social media are the result of search engine optimization (SEO) tools created for shitty blog posts. These SEO tools are designed to leverage “keywords”, enabling the blog post  to “rank high” on Google. We just showed you in the previous paragraph the results when you enter “cheap auto Insurance” on Google: line after line of useless garbage and ads. 

I don’t trust Google or any bullshit blog plastered with offers, specials, and pop up windows which exist just to make you click on something. For insurance or anything else.

What is  good advice  when it comes to buying insurance?

Buying insurance is different from buying other services; you are buying a promise to deliver. 

For example, a bank  gives you a loan, not a promise to give you a loan.  Who cares about the “added services” they will provide later? You have the money now; just pay the bank back over time, and that’s it.

Insurance is special.

Who cares about the funny gecko or the glossy brochures from Blue Cross Health Insurance? What if the insurer denies coverage or drags its feet forever to pay your claim? The promise is not as good as you expected. Buying “the cheapest coverage” does not sound so smart anymore…

Word of warning:I am frugal and I want to save your hard earned money.

My family claims that I am cheap; others say that I am thrifty.

I can park my car 10 blocks away to save $20 on parking. Or I can walk 10 blocks and not pay the bus. I cannot recall the last time I used valet parking.

And the list is long: my scratch paper is a pile of used envelopes I get from junk mail. I write on the back. I save paper clips. I always switch off the lights behind people. I keep the temperature of the house at 60 in the winter and wear a fleece (luckily I live in California where the winters are short). 

Being an engineer helps: I repair electric motors and broken tools. I have a MIG welder to repair steel. I use epoxy resin to fix wood. I have an industrial sewing machine and make drapes, pillow covers and cushions out of recycled fabric. I used to sew the bottom of my kids’ pants and also sew broken straps on their backpacks. I hate waste and this consumerism society we live in is hard on me. My kids are now grown and will  not let me sew their clothes anymore…

I remember from my time at Wharton a great book from Ace Greenberg, “ Memos from the Chairman”. It was a great read and I loved his memos, especially the one on “not buying paperclips”. I highly recommend this very entertaining book.

Of course, I have cabinets full of “magnificent cloth”, given to me by a company that was going out of business. Ready to make pillows or stylish face masks whenever I have time. And scrap wood (teak, old redwood) to make furniture. And also plenty of spare parts for my vintage 1970 Snowcat…

My hero is Lauren Weber, a journalist at the Wall Street Journal  who wrote “In Cheap We Trust”. Her book is entertaining, her style is outstanding and the book is very well documented. I see myself as a conservationist and I hate waste: wasting food, wasting electronics and laptops because they become obsolete too fast. 

I particularly  hate wasting money on insurance I will never use

Why waste money on insurance you will never use?

Friends have asked me “why do you, JB, such a cheap guy, end up paying for insurance when most of the time you won’t need it?”. 

That is a difficult question for me. I hate that question; it pains me to waste money on something I will – maybe – never use. My answer to them is never a good one. I swallow hard and I try to explain that I really struggle with the fact that, for years, I have paid more than $1M in premiums for car, home, boat, life, and health insurance. Companies I founded and ran have paid millions of dollars of premiums over the years. 

This is a significant amount of money, and way more than what I have in my 401K. It is unlikely that I will recover any of that in the form of claims from insurance companies.

My last term life insurance will expire soon. I have been paying life insurance premiums for my whole life. I must have a twisted mind, but it pains me that I did not die and therefore my beneficiaries never collected any proceeds from the life policies.

I have a stellar driving record and have never been in a car accident. Loss prevention in my life is everywhere, like a second nature. I honed my skills providing risk management consulting services for Fortune 50 companies.

Disclaimer: I live near San Francisco. This is the place where everybody is “waiting for the big one”, what we call the next earthquake. Lately, wildfires have been out of control, taking out whole towns. This is clearly the wrong place when it comes to risk management, I should have picked a safer place. 

I am an insurance industry insider; I offer my tools and tricks

I am building Kiv Insurance to share my tools and tricks for buying and using insurance. Kiv means “Keep in View” and that means I want to be as transparent as possible. In the past 40 years:

  • I bought insurance for my family and my companies. Millions of dollars. In the US and other countries.
  • I built products for insurance companies. I have built models to securitize insurance products and sell them to Wall Street.
  • I created products, but I also paid claims just about anywhere in the world. Sometimes it was a ransom for a kidnapped employee, or an explosion in a North Sea oil rig, or product liability claims for a US toy manufacturer.
  • I founded and served as the first CEO of the largest online insurance company, Esurance, now a $2B company and part of Allstate.
  • I advised more than 10 hedge funds (all in excess of $2B) on insurance matters.
  • I founded a multinational consulting brokerage firm that I sold 10 years later to the third biggest broker in the world.
  • I built insurance products for credit card companies and banks (those products form the basis of the “value added services” you get on that credit card).

Saying that I am an insider to the industry is an understatement.

My background is math and physics undergraduate degree and an MS in engineering. That is why I started in the insurance world in actuarial and underwriting functions. My MBA at Wharton was in finance. All of that is pretty much left brain.

At the companies I founded and ran, I documented everything, got signed waivers, and signed contracts. I am always on high alert if I deal with shabby vendors. I avoid litigation every time I can by putting in place a thorough risk management plan. 

But the insurance budget is always too big: do you need directors & officers coverage? An umbrella? Gap hospital coverage? Professional liability coverage? Kidnap and ransom coverage?

You will become a better insurance buyer if you follow my down-to-earth advice. That advice forms the basis of my book “Become a Smart Insurance Buyer”. Hopefully you already signed up on Kiv Insurance to get it when the pdf is ready. And it is free. And we will send you the updates as we write them. What else do you want?

What is the difference between “being cheap in your life and still buy insurance” and “continue to be cheap when you buy insurance”?

Well, after forty years in the financial services industry, and a good part in the insurance industry, I have learned a few things. I have learned where to draw the line, when and what I should buy and not buy. I know my rights. If there is coverage and I find in front of me an insurer acting in bad faith, I quickly fight. I will give you examples in this blog so you can fight and win.

I understand value and time value of money. There is no point saving 15% for 15 minutes of your time if you end up with crappy service and a mediocre body shop when you need it.

Buying extended warranty coverage on the multiple things you buy? Amazon and other vendors have made that very easy, but it is often not the right thing to do. And you often are already covered on those purchases elsewhere (we’ll have a whole post on that subject).

I have run businesses, lots of them, small and big. 

I have bought insurance and sold it too. I have been dragged into numerous stupid lawsuits and I am glad I had a good insurance company to defend us. Sometimes I had to shut down simply because the insurance company refused to defend us and we collapsed under high legal fees.

That takes me to the other subject: peace of mind. In the US, lawyers are very expensive. They can be outrageously expensive when time is running out and they know you can’t back out when a case gets started. When you pay a lawyer $1,000/hour for weeks you will regret your decision to not buy insurance. “I wish I had coverage for defense cost”…

Health Insurance in the US

You want tips on buying health insurance in the US? 

I will try my best but that one is a lost cause: we are already paying four times what other industrialized countries pay, yet we have a lower life expectancy. There is so much waste in health care…

I will offer you tips to save money and better navigate the health insurance system as well.

Summary:

  • I am frugal and hate wasting money. I want to help you SAVE YOUR HARD-EARNED MONEY.
  • I am very experienced in the industry as a buyer and a seller of insurance products.
  • I don’t mind ruffling feathers. The majority of insurance companies are great, but there are some bad apples out there. I am not afraid to flag them so you don’t have to make mistakes.
  • There are “must have” insurance items and “useless coverage/already covered elsewhere” items. I will guide you through them.
  • There are some good and experienced insurance brokers. tOthers are just playing golf, while paper pushers back in the office handle the documentation. In other words, some add fantastic value; others bring nothing. You will learn the difference.
  • The goal of Kiv Insurance is to make you a smarter buyer ASSUMING you have to buy (and often, you should not buy insurance).

Reach out to me if you have any questions. And sign up to receive my regular tips.