Like many other business owners, David was very diligent in watching his daycare's expenses. He was always trying to find new ways to lower his average costs and increase his margin. He also hated dealing with daycare insurance policy, but shopped it every year looking to lower his insurance premiums. He had a tendency to move from insurance provider to provider over time.
When a massive hailstorm tore through Waco last spring, it shattered windows, dented his playground equipment, and damaged the roof of his daycare. David wasn’t worried at first because he always made sure he had an up to date insurance policy. Unfortunately for David, he assumed his policy would cover the repairs.
When David filed the insurance claim, he got a shock to his system. When he last changed his policy it had come with reduced property coverage for hail damage. The payout wasn’t near enough to fix everything that was damaged. The money he thought he had saved over the years was nothing compared to what he now had to pay out of pocket.
David was second guessing changing insurance every year just to save a few dollars. He was trying to figure out where he had gone wrong. Many daycare owners make the same mistake, not realizing that frequent changes in insurance coverage can lead to serious problems when they need it most.
After his claim issue, David started looking into what went wrong. He had always focused on getting a lower price, but he had never stopped to check what he was potentially giving up each time he switched. He assumed that the professional advice of agents was all the same. The insurance company he moved to during the last change had limited storm coverage in the form of higher deductibles and actual cash value settlements for property. He didn’t realize it until it was too late.
Switching insurance frequently can create unexpected risks. Some that we see with frequency are easily fixed.
- Gaps in coverage options that leave commercial property or important things like outdoor equipment, underinsured or completely excluded.
- Policy differences that might not seem obvious until a claim is filed and the payout is lower than expected. The deductible change created a financial burden for David.
- Insurance underwriters seeing a history of frequent switching can make them less willing to offer comprehensive coverage at the best prices in the future.
David never thought about these things when switching providers. He just looked at the price and assumed all policies were basically the same. But after his storm damage, he realized that not all business insurance policies offer the same protection.
Before his claim, David assumed that reducing the cost of insurance coverage was all that mattered. If two policies both said they covered property damage, then they must be the same, right? After talking to an experienced insurance agent who specializes in Texas daycare operations, he realized how wrong that thinking was.
Some policies include stronger protections for things like business interruption, playground equipment, or robust liability coverage. Others offer lower rates by reducing payouts for certain types of damage or liability limits. David learned the hard way that his new policy had a cap on hail damage since it was not replacement cost coverage. This is why a key reason his claim didn’t pay enough.
When shopping for insurance, Texas daycare owners need to compare more than just price. They should ask for a full comparison that looks at three important areas.
- Do the policy options cover my daycare's unique needs. Or are there exclusions I didn’t have before?
- Are my coverage limits high enough to fully replace damaged property or cover liability risks?
- Will my business be able to survive if a disaster happens, or will I be stuck paying thousands out of pocket as the daycare business owner?
David now knows that reading the details of his policy matters just as much as the annual premium. He wishes he had checked before switching to a reduced cost plan.
When David first switched insurance providers, he didn’t think much about the company itself. He just knew he wanted to save money. To be fair, most Texans do not think about the insurance company they choose until they need to file a claim.
After the hailstorm, David realized how important it is to have an insurance company that supports its policyholders and provides customer service. Some insurance carriers offer low prices but provide terrible service when it’s time to file a claim.
As problems have grown in the Texas commercial property insurance market, it has not been uncommon for the claim process to take months to approve payments. This slow moving process and reduced coverage for day care property created a massive headache for David that proved to be additional insurance costs beyond the annual premium.
Before switching insurance, daycare owners should look beyond the price and consider three important things to consider to determine if you will have adequate coverage.
- How does this company handle claims? Do they have a good reputation for paying fairly and on time?
- Will this policy and coverage limits protect my daycare's needs, or is it cheaper because it offers inadequate financial protection?
- Does this company understand the needs of Texas daycare insurance requirements? Or do they just offer general business insurance policies?
David learned a hard lesson that the cheapest policy isn’t always the best. He wished he had looked into how his insurer handled claims before he needed one.
After everything he went through, David knew he needed a different approach. He decided it was time to work with an experienced insurance broker who understands what Texas daycare business owners need to protect them from potential risks.
True Texas Education Insurance is a program provided by Insurance For Texans to help daycare business owners find coverage that actually fit their daycare’s needs. They start by asking questions so that they can customize insurance options so that you won't be left with surprise gaps and have proper insurance coverage.
If you own a daycare in Texas and want to make sure you have real protection and not just a low price, True Texas Education Insurance can help.
Click the button below to get the right coverage for your daycare without the risks of switching policies every year.