Why Agents Should Care About Underinsurance

By Jerry Fox Market Leader –Insurance Agents & Brokers, CoreLogic Insurance & Spatial Solutions | May 8, 2018

This post is part of a series sponsored by CoreLogic.

When it comes down to it, the biggest loser in a property that is underinsured is the homeowner who may not be able to rebuild their home to the way it was before a loss. Homeowners count on their local property insurance agent to protect their interests and make sure they are adequately covered under their homeowner policy. When that doesn’t happen, agents may face several adverse effects including losing the relationship with their client, bad social publicity or worse still, a lawsuit.

Agents are typically forced through the underwriting process to use the valuation solution provided through the carrier’s agent portal. But, because of the risk they personally face, agents should consider encouraging carriers to use solutions that more accurately represent true reconstruction costs and has a proven process for validating their results.

Carriers do not choose or switch valuation providers without a lot of thought and research. Many factors are considered including the cost of the solution, rate setting, underwriting guidelines, potential hazard reporting, and reinsurance contracts. But carriers also want to make it easy for agents to do business with them and many top insurers are realizing that streamlining the underwriting workflow for agents is a win-win for everyone involved. For example, if the workflow is too cumbersome or complex, agents may be unwilling or unable to provide key information on the property. However, if the workflow is integrated with a robust pre-fill solution, agents can simply validate the property characteristics instead of attempting to fill in data fields themselves with homeowner-supplied information. Property pre-fill also feeds a more accurate reconstruction cost, enables a more consistent and familiar workflow and can help protect an agent’s most valuable assets—their reputation and relationship with clients who are most often neighbors and friends.

As an agent, you are still the catalyst to most touch points that carriers have with homeowners. Encourage your carriers to use a valuation tool that gives you the ability to quickly and accurately calculate reconstruction cost thus helping to protect the best interests of your clients as well as your business from unnecessary legal issues or negative exposure.

About Jerry Fox Market Leader –Insurance Agents & Brokers, CoreLogic Insurance & Spatial Solutions

Jerry connects the needs of U.S agents and Canadian brokers with CoreLogic technologies, vision, innovation and support. Jerry received his bachelor’s degree in business administration from the University of St. Thomas. For 26 years, Jerry was a principal at James M. King & Associates in Bloomington, Minnesota, where he oversaw the organization’s technology platform and directed implementation of information technology systems. He also was a consultant to leading automation vendors, carriers and agencies and still participates in several industry organizations that facilitate agency automation strategies. He is a past Chairman of NetVU and was selected as Agent of the Year by the Minnesota IIABA for his work in automation education. He is currently co-chair of the Agents Council for Technology (ACT), Changing Nature of Risk work group.

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