John Fairchild is an insurance agent, broker and trainer in Lodi that works with Farmers Insurance. (Brian Feulner/News-Sentinel)

Lodi agent and broker John Fairchild Sr. wants to educate and relate before covering clients

For 21 years, John Fairchild Sr. has been selling insurance in Lodi. But he's not focused on profit. Fairchild calls himself an educator and believes that people need to understand the industry, have a good working relationship with their agent and walk away from the process having exactly the coverage that's best for them.

Though he's a licensed Farmers Insurance agent, Fairchild is also an independent broker and trains others for their licensing. He's in the top three percent of the company's agents, and believes that has a lot to do with the time he takes to inform and get to know his clients.

Fairchild took a few minutes to discuss the ins, outs and importance of coverage with Business Editor Marc Lutz.

Q: What should people know to make smart decisions when shopping for insurance?

A: A lot of people look for price. Price, price, price. And that's a mistake. There's many things we learned as kids, and one of those was, "you get what you pay for." Many people don't know what they purchase when they buy just a low price. There are insurance companies out that that focus on price, and there are some that focus on service. You need to blend the two together. When I sit down and interview with clients, I need to find out what they want and what they know. I try to educate my clients.

They need to find a good agent, then start looking at insurance. There has to be a good match.

Q: How does insurance work?

A: Let's talk about auto insurance. There're different levels of auto insurance. The lowest level a person can have in bodily injury and liability is $15,000, meaning if you hit someone, your insurance will pay $15,000 for that coverage. That per-person coverage will take care of one person up to $15,000.

We're talking liability. It means you're liable. You're responsible for the damage you do to someone else. Well, what if you hit a car and that car hits another car and that car hits a bus? If you started that chain reaction, you're responsible for two cars and bus and all the people inside. So you can see where ($15,000) would fall short.

Q: What are some examples of regulations that insurance agents/brokers have to abide by?

A: Unfortunately, the Department of Insurance doesn't have "teeth." They're there to oversee what's going on, and they regulate how an insurance company gets to their rating.

There are too many loose cannons out there. They're allowed to do some very bad work. Lack of regulation allows people to buy crummy insurance.

When we get into life insurance, for example, regulations state that I'm not allowed to sell life insurance as an investment, but it has investment implications.

Q: Why does auto insurance get cheaper when a person becomes 25 years old?

A: Why are there less auto-related deaths from the age of 25 to 40 than there are from 18 to 25? The same reason. We look at groups, and the least-risky group is the age of 25 through 65. The most expensive group is 15 to 21. Then next most expensive is 65 to when they pass away. The first group have hormones going on and lack of experience. (The second group has) settled down and they have experience. (The last group) has experience, but their reflexes and eyesight are gone. Cost of insurance is a direct relationship to risk.

Q: What kind of training does an agent and a broker need to be certified?

A: We don't call them certifications. We call them license. Unfortunately, it's not enough. Way, way too short. They need to get a property and casualty license. They can do it with one 52-hour week of training, then go in and pass a test. Not enough. They get a license, and they still don't know what they're doing.

I'm a little different. I got trained by my first district manager. He was an insurance person. He wasn't a marketing guy. He was an insurance guy. He taught me coverages and why.

Q: How important is insurance?

A: Depends on who you are. To some people, it's not important. Insurance is a way to take small dollars and protect your assets. If you don't have insurance and something happens, someone's going to knock on your door and take you to court. And the judge is going to say, "guilty, and you owe X amount of dollars." If you don't have insurance, then you have to pay. If you don't have the money, you'll have to declare bankruptcy, you will have to spend all your assets to take care of the liability exposure that you created.

The more you have the more important it is.

Q: What kind of personality types are best suited for the insurance industry?

A: To be a good insurance person, using the philosophies that I have, you need to be patient. You have to want to help people. You have to be a little bit of an educator. You have to put other people before yourself. You need to be very honest. If you do a good job, your just reward will come.

Q: Are there reasons why a person could not get any type of insurance? What are they?

A: No. Someone will insure you. If it's impossible to insure him, it's probably because he's in jail. There's someone out there that will insure you, but you'll pay the cost. If a person gets more tickets, he may not be able to afford his insurance, therefore he's grounded or driving without insurance. The government even has a thing called "assigned risk," meaning nobody wants him, but somebody has to take him. And every company has to share in that pool. It's going to cost him.

Q: What's the strangest thing you've heard someone wanting to insure?

A: I've never had anyone come to me with anything that jumps out as being real strange. I can insure anything that comes through my door. I can go find anyone that wants to insure anything. I can insure an alligator farm, a dynamite factory, anything.

Q: Is insurance fraud pretty common these days? What do companies do to combat the problem?

A: Yes. (They can't do) enough. But a lot. We investigate. We have special units that investigate. And we try to apprehend. Insurance fraud is a big reason why prices are higher.

Q: What are some common misconceptions about insurance?

A: People come in thinking that insurance companies don't want to pay a claim, that they'll do anything to get out of it. Our adjusters are trained to look for every possible reason to pay an honest claim.

A misconception is, cut out the middle man. That drives me nuts because I offer a very valuable service and I can compete with these budget people all day long. We're not higher: we're better coverage. You get what you pay for. It's important to find a good agent.