Unfortunately, “Mutual Trust” between parties to a policy really needs to be “Trust, but, Verify”. That’s what underwriters have to do and that’s what “Difference in Conditions” clauses are all about.
The “Verify” part of the formula was once handled pretty well by fairly large, risk management / loss control groups within the companies. They helped weed out claim fraud, unsafe conditions that can lead to loss, etc., thus keeping losses and consequentially, premium levels to the lowest practical minimums. They also performed a valuable Marketing service for the company by maintaining close personal contact with the client periodically and helping them solve loss causing problems.
The Loss Control / Risk Management groups that companies maintain today are a small fraction (10-20%) of the size they used to be. That’s by design, I think.
Salaries that keep premiums from rising year after year are expensive in two ways. Eliminate most of them and you solve two problems.
Unfortunately, “Mutual Trust” between parties to a policy really needs to be “Trust, but, Verify”. That’s what underwriters have to do and that’s what “Difference in Conditions” clauses are all about.
The “Verify” part of the formula was once handled pretty well by fairly large, risk management / loss control groups within the companies. They helped weed out claim fraud, unsafe conditions that can lead to loss, etc., thus keeping losses and consequentially, premium levels to the lowest practical minimums. They also performed a valuable Marketing service for the company by maintaining close personal contact with the client periodically and helping them solve loss causing problems.
The Loss Control / Risk Management groups that companies maintain today are a small fraction (10-20%) of the size they used to be. That’s by design, I think.
Salaries that keep premiums from rising year after year are expensive in two ways. Eliminate most of them and you solve two problems.