Agents Who Play It "Safe," Failing Their Clients

A letter to the editor I just sent to an insurance publication...

I am reviewing insurance for a client. The agent's renewal review for
last year includes a statement that they never recommend limits of
coverage.

Really?

What exactly is your job then? Are you a clerk for the insurance
companies? "Here is what we can offer. Buy what you want." It's the
big-box approach to insurance service! Why exactly do people buy
insurance from you?

This comes from the world of errors-and-omissions-loss-prevention, a
pervasive cult that insists that everything an agent does must foil
the perverse suit-happy public.

Take no risks - offer no advice, is the mantra.

Horse-hockey! Insurance buyers need informed advice and counsel. The
world of insurance is complicated and complex. It is the agent's job
to stand up and advise the client. Why else would they need you?

While you are at it - remove the stupid message from your voicemail.
"Coverage cannot be bound or amended using a voice mail system." Show
me one case where a customer successfully sued an agent because a
voicemail message included a coverage change, and I will donate $100
to the Red Cross in your name.

Pablum for the mindless insurance lemming.

Read more...

Liberalization

According to Ray Burnham's most excellent insurance dictionary...

"Liberalization clause - automatically broadens the coverage of all policies if a policy revision that would broaden coverage without additional premium is adopted during the policy period; is designed to prevent mass cancellations and rewrites; does not apply to new programs, e.g. the 1984 HO forms replacing the 1997 HO forms."

I do a great deal of work for banks. The insurance policies being sold now are a great deal broader that those sold even a year ago. Many banks are currently insured by three year policies for their bond's and directors' and officers' insurance. That can mean that their insurance is, in some ways, antiquated.

Nobody seems to be calling for liberalization - I think I'll start.

Read more...

Buyer's Insurance Market Continues

Without any hints as to whom I am speaking of (agents read this blog too - I will not mention the industries or the regions), I just received several proposals on bid projects.

The renewals are being offered at about 20% below last year's premium with significantly better coverage. The competing carriers (multiple agents) are offering quotes at 40% off of the current premium - again, with much better coverage.

The accounts I am speaking of have an average premium of over $200,000 and have not been to bid in about five years.

I say again... If you have not bid your insurance in the past three years using multiple agents and multiple insurance companies, you are probably paying too much and not getting all the coverage you can/should have.

There are reasons not to bid your insurance. That decision, however, has a cost - in coverage and in premium.

Read more...

The "Not Covered" of Property Insurance

Here are the events usually not covered by property insurance:

-Flood
-Earthquake
-Intentional Damage By You
-Animals and Insects

Your agent can help you with the first two.

Don't do the third.

Frequent inspections for the last.

Read more...