| Insurance is an expense we'd all like to minimize – | | | | Age of house; |
| without loss of quality. There are several services that | | | | Whether you have fire extinguishers; |
| encourage insurers to make their best offers, but it | | | | Value of furnishings – often estimated as about |
| can be difficult to distinguish whether the website or | | | | 75% percent of the value of the property; |
| 800 number is truly representing multiple insurers, or is | | | | Zip code you live in; |
| just pushing a single company's products. We also find | | | | Any special valuables you want to include. |
| that, having requested quotes, there are likely to be | | | | What liability limits you would like; |
| follow-up e-mails and phone calls for a year or more | | | | Whether you want the insurance to keep pace with |
| afterwards that need to be dealt with. Once a | | | | inflation; |
| company has your contact information, they tend to | | | | The size and the AM Best or other industry rating of |
| be very persistent and even aggressive in trying to sell | | | | the company offering the insurance; |
| you insurance. | | | | Etc. |
| But there is a better way. What if you could solicit bids | | | | A review of your existing policy can help tailor your |
| for the insurance package you need without revealing | | | | custom-made request. |
| your contact information? Say you could spell out | | | | Do the same for all the other insurance needs you |
| what level of house insurance, car insurance, life | | | | have. Review each policy that you want to replace, or |
| insurance and/or medical insurance you need, and | | | | review websites of insurers to understand what needs |
| have insurers bid on the package in competition with | | | | to be specified for new policies you don't yet have, |
| each other – without contacting you directly or | | | | and carefully select what you want. |
| through e-mail – wouldn't that be a great way to | | | | Once you have posted your requirements on a |
| select your provider or providers? | | | | reverse auction website, you'll want to monitor the |
| You can do this. Reverse auction sites allow you to | | | | post so that you know when insurers or agents have |
| specify what you want, and the site invites suppliers to | | | | questions to clarify your needs. You'll also be able to |
| bid on your needs. You decide what service, product | | | | see what bids are coming in and start assessing the |
| or combination you want and how long the bidding | | | | different suppliers from their write-ups. Over time, each |
| should be open. So you could post your needs six | | | | supplier builds up a rating on the website based on |
| weeks before your insurance contract expires, let it | | | | how they have served other clients, so you should be |
| run for a month, and have a couple of weeks to | | | | able to assess their reliability. Initially, before they have |
| select the winner and create the contract. | | | | a significant rating, you will have to trust that they fairly |
| Reverse auction websites do not allow you to publish | | | | represent their principal (the company whose insurance |
| your contact information. This protects you from | | | | they are quoting), and base your choice on evaluation |
| aggressive solicitation, and avoids bypassing the site | | | | of the insurance company rather than the agent. |
| – which normally charges a small amount for the | | | | Finally, at the end of the auction period that you |
| service they provide. Some will allow the provider to | | | | specified, or earlier if it suits you, you can make your |
| publish contact information, trusting that you will | | | | pick and accept a specific bid – assuming that at |
| complete the contract through the site, since the site | | | | least one meets your needs. From there, you and the |
| typically allows listings to be free and charges a small | | | | agent work out the details. Remember that the bid you |
| success fee to the winning bidder. Most people find | | | | accept represents a legal contract. The agent is |
| one of the greatest benefits of the reverse auction | | | | obliged to provide you what was bid at the price bid, |
| process to be the privacy it generates for them, and | | | | and you are obliged to pay that price for the insurance |
| the sense of control they have over the transaction. | | | | you have contracted for. Be aware that they may still |
| This is only possible if you do your negotiating through | | | | try to upsell you, so be prepared. The more homework |
| the site without revealing your contact information – | | | | you have done before accepting a contract and |
| it leaves you in charge of how to evaluate the bids, | | | | talking to the agent, the better prepared you'll be to |
| and avoids coming under pressure from each supplier | | | | stick to your original requirements. |
| who gets your contact information before the contract | | | | If you decide to split the contracts between two or |
| is completed. | | | | more insurers, you'll have to accept a bid for one part |
| The art in posting a requirement is to understand what | | | | of the package, and re-post the remainder, making |
| the supplier needs to know, and to describe what you | | | | sure that your desired bidder is invited to bid on the |
| want clearly enough that the suppliers can bid | | | | restructured package. |
| responsibly. For house insurance, you might want to | | | | Try it and see whether you don't reduce your |
| specify: | | | | insurance costs – without losing quality of coverage |
| Replacement value of the property; | | | | and without the avalanche of agents contacting you |
| Type of construction; | | | | for your business. |