Insurance is an expense we’d all like to minimize without loss ofquality. There are several services that encourage insurers to maketheir best offers, but it can be difficult to distinguish whether thewebsite or 800 number is truly representing multiple insurers, or isjust pushing a single company’s products. We also find that, havingrequested quotes, there are likely to be follow-up e-mails and phonecalls for a year or more afterwards that need to be dealt with. Oncea company has your contact information, they tend to be verypersistent and even aggressive in trying to sell you insurance.

But there is a better way. What if you could solicit bids for theinsurance package you need without revealing your contactinformation? Say you could spell out what level of house insurance,car insurance, life insurance and/or medical insurance you need, andhave insurers bid on the package in competition with each other without contacting you directly or through e-mail wouldn’t thatbe a great way to select your provider or providers?

You can do this. Reverse auction sites allow you to specify what youwant, and the site invites suppliers to bid on your needs. You decidewhat service, product or combination you want and how long thebidding should be open. So you could post your needs six weeks beforeyour insurance contract expires, let it run for a month, and have acouple of weeks to select the winner and create the contract.

Reverse auction websites do not allow you to publish your contactinformation. This protects you from aggressive solicitation, andavoids bypassing the site which normally charges a small amountfor the service they provide. Some will allow the provider to publishcontact information, trusting that you will complete the contractthrough the site, since the site typically allows listings to be freeand charges a small success fee to the winning bidder. Most peoplefind one of the greatest benefits of the reverse auction process tobe the privacy it generates for them, and the sense of control theyhave over the transaction. This is only possible if you do yournegotiating through the site without revealing your contactinformation it leaves you in charge of how to evaluate the bids,and avoids coming under pressure from each supplier who gets yourcontact information before the contract is completed.

The art in posting a requirement is to understand what the supplierneeds to know, and to describe what you want clearly enough that thesuppliers can bid responsibly. For house insurance, you might want tospecify:

• Replacement value of the property;

• Type of construction;

• Age of house;

• Whether you have fire extinguishers;

• Value of furnishings often estimated as about 75% percent of thevalue of the property;

• Zip code you live in;

• Any special valuables you want to include.

• What liability limits you would like;

• Whether you want the insurance to keep pace with inflation;

• The size and the AM Best or other industry rating of the companyoffering the insurance;

• Etc.

A review of your existing policy can help tailor your custom-maderequest.

Do the same for all the other insurance needs you have. Review eachpolicy that you want to replace, or review websites of insurers tounderstand what needs to be specified for new policies you don’t yethave, and carefully select what you want.

Once you have posted your requirements on a reverse auction website,you’ll want to monitor the post so that you know when insurers oragents have questions to clarify your needs. You’ll also be able tosee what bids are coming in and start assessing the differentsuppliers from their write-ups. Over time, each supplier builds up arating on the website based on how they have served other clients, soyou should be able to assess their reliability. Initially, beforethey have a significant rating, you will have to trust that theyfairly represent their principal (the company whose insurance theyare quoting), and base your choice on evaluation of the insurancecompany rather than the agent.

Finally, at the end of the auction period that you specified, orearlier if it suits you, you can make your pick and accept a specificbid assuming that at least one meets your needs. From there, youand the agent work out the details. Remember that the bid you acceptrepresents a legal contract. The agent is obliged to provide you whatwas bid at the price bid, and you are obliged to pay that price forthe insurance you have contracted for. Be aware that they may stilltry to upsell you, so be prepared. The more homework you have donebefore accepting a contract and talking to the agent, the betterprepared you’ll be to stick to your original requirements.

If you decide to split the contracts between two or more insurers,you’ll have to accept a bid for one part of the package, and re-postthe remainder, making sure that your desired bidder is invited to bidon the restructured package.

Try it and see whether you don’t reduce your insurance costs without losing quality of coverage and without the avalanche ofagents contacting you for your business.