Florida requires homeowners & auto insurers to include a “summary of coverage” with every new and renewal policy, but it is so basic, it doesn’t help much. For one thing, it doesn’t even address ACV versus replacement cost.
I wish we had a “duty to read” requirement! On the other hand, policies are confusing and are becoming more so, because companies add manuscript endorsements. So much for ISO’s HO003 … pick an edition date! I’ve spent many hours reading policies and endorsements so at least I will know what I’m selling! Still, consumers have some responsibility to read their policies, as well.
I find it astonishing that consumers don’t understand that policies are contracts, even if they are unilateral ones! Companies write policies based on the signed statements on applications. It is wonderful to be able to run CLUE and MVR’s prior to point of sale, but for me, that’s mostly auto, not homeowners, yet. I really don’t like liars! What else have they withheld? If they don’t tell me the truth, how can I properly insure them? Talk about an E&O exposure!
So, should a state mandate what Delaware is proposing? I think not, as Big Brother makes people even less inclined to take responsibility. The idea about what claims not to report so you don’t get non-renewed has some merit, but my experience (25 years) is that there aren’t necessarily hard and fast rules. Companies and agents look at frequency, severity, cause of loss and other circumstances: in effect, we re-underwrite. I’ve asked companies to get off risks I thought had deteriorated for various reasons. I’ve also asked them to stay on risks. In the last 2 years or so, I haven’t written a homeowners policy with less than a $1000 all peril deductible. I tell clients “pay the premium for the cat loss, don’t treat this policy as a maintenance contract”. I explain frequency & severity, and have written a ton of business: there are credits for higher deductibles so my premiums are competitive and, except for our really wild 2004 hurricane season (Charley, Frances and Jeanne) this strategy has helped my loss ratios. But the ‘canes WERE the cat losses that insurance was supposed to address! Yea for our industry!
Don’t most agents send a cover letter along with the policy to their insured’s at least outlining some of the coverages in the policy and advising the insured to read the policy.
I realize that the agent has a respondsibility, but doesn’t the insured as a consumer have a respondsibility also.
If the insured is only concerned with price, that you get what you pay for.
No. I don’t tell them anything. If they don’t read their policy it’s their own fault. The disclosure information is already in the policy anyway, it’s just rearranging where the information is, that’s all.
I try and disclose coverage gaps when going through the application, to reduce the probability of E&O claims. I tell everyone to get a cup of coffee & spend the time needed to read their policy. I tell them to call me with their questions, but no one ever does. That tells me that no one bothers to read their policies, before, during, and after a loss has occured. From the look of the regulatory environment, it is the agent’s responsibility to advise the insureds anyway, as they are not “sophisticated” insurance consumers (if they are, then the courts might see it another way).
The policy IS a disclosure, that what all the printing is for. I do send a letter hitting the highlights other wise my letter would be 30 pages just like the policy, but they should still read the policy.
Anyone that “assumes” everything is covered is just not telling the truth.
I agree 99% only read the premium amount, they dont CARE what is covered at payment time, only at claim are they interested.
This is the way it should be. Companies should also be required to disclose their payment policies concering required upgrade changes. Example, house struck by lightning and electrical had to be rerouted with new electrical box. Company would not pay for this because it is considered an upgrade.
The explanation of coverage, or lack thereof, is a nice touch (I try to address certain things in an annual renewal letter), but I understand an agent who chooses not to do this, too. It’s an E&O thing. You can’t explain everything that’s excluded/covered to everyone, you’d have no time to do anything else. But once you start picking and choosing what to address, you leave yourself open to a E&O claim for the stuff you leave out. And you’d better explain the same stuff the same way to all your customers. The guy you leave out will be the one who has a claim denied, then you’ll have to explain why he didn’t get the letter you send to “all” your clients. Then again, maybe I’m just a little paranoid about lawsuits. Anyway, I’d much rather have the insurance company be required to make the discosures.
Wow, another page of paper to go out. Will this only cause carriers to leave the state since the premiums they collect from De. will not justify this new hoop they must jump through.
Since when did anyone think flood was covered by homeowners insurance???
Every time you turn around we hear more and more about how Government, be it Local, State or Federal, want’s to legislate the public from themselves as in this case. It seems to me that the largest problem folks face today is they expect a form of Government to bail them out if they made a wrong choice, bad investment or just plain screw up.
The Comm. from Del. is just one politician that promotes this way of life that “Big Brother” will take care of you , most of the time they are only looking to get reelected to their office or want to go for a higher office so they can continue to pander to those who expect they don’t have to be responsible for their own actions.
We have evolved to become a Society that believes that Government will take care of everything and that we have no responsibility to take care of ourselves. It is time we started being responsible for our own actions and quite blaming other or expect “Big Brother to bail us out .
Florida requires homeowners & auto insurers to include a “summary of coverage” with every new and renewal policy, but it is so basic, it doesn’t help much. For one thing, it doesn’t even address ACV versus replacement cost.
I wish we had a “duty to read” requirement! On the other hand, policies are confusing and are becoming more so, because companies add manuscript endorsements. So much for ISO’s HO003 … pick an edition date! I’ve spent many hours reading policies and endorsements so at least I will know what I’m selling! Still, consumers have some responsibility to read their policies, as well.
I find it astonishing that consumers don’t understand that policies are contracts, even if they are unilateral ones! Companies write policies based on the signed statements on applications. It is wonderful to be able to run CLUE and MVR’s prior to point of sale, but for me, that’s mostly auto, not homeowners, yet. I really don’t like liars! What else have they withheld? If they don’t tell me the truth, how can I properly insure them? Talk about an E&O exposure!
So, should a state mandate what Delaware is proposing? I think not, as Big Brother makes people even less inclined to take responsibility. The idea about what claims not to report so you don’t get non-renewed has some merit, but my experience (25 years) is that there aren’t necessarily hard and fast rules. Companies and agents look at frequency, severity, cause of loss and other circumstances: in effect, we re-underwrite. I’ve asked companies to get off risks I thought had deteriorated for various reasons. I’ve also asked them to stay on risks. In the last 2 years or so, I haven’t written a homeowners policy with less than a $1000 all peril deductible. I tell clients “pay the premium for the cat loss, don’t treat this policy as a maintenance contract”. I explain frequency & severity, and have written a ton of business: there are credits for higher deductibles so my premiums are competitive and, except for our really wild 2004 hurricane season (Charley, Frances and Jeanne) this strategy has helped my loss ratios. But the ‘canes WERE the cat losses that insurance was supposed to address! Yea for our industry!
Don’t most agents send a cover letter along with the policy to their insured’s at least outlining some of the coverages in the policy and advising the insured to read the policy.
I realize that the agent has a respondsibility, but doesn’t the insured as a consumer have a respondsibility also.
If the insured is only concerned with price, that you get what you pay for.
No. I don’t tell them anything. If they don’t read their policy it’s their own fault. The disclosure information is already in the policy anyway, it’s just rearranging where the information is, that’s all.
It would seem that it be that little extra service touch, that might keep the business, instead of losing it to Nationwide, GEICO or Allstate
I try and disclose coverage gaps when going through the application, to reduce the probability of E&O claims. I tell everyone to get a cup of coffee & spend the time needed to read their policy. I tell them to call me with their questions, but no one ever does. That tells me that no one bothers to read their policies, before, during, and after a loss has occured. From the look of the regulatory environment, it is the agent’s responsibility to advise the insureds anyway, as they are not “sophisticated” insurance consumers (if they are, then the courts might see it another way).
The policy IS a disclosure, that what all the printing is for. I do send a letter hitting the highlights other wise my letter would be 30 pages just like the policy, but they should still read the policy.
Anyone that “assumes” everything is covered is just not telling the truth.
I agree 99% only read the premium amount, they dont CARE what is covered at payment time, only at claim are they interested.
This is the way it should be. Companies should also be required to disclose their payment policies concering required upgrade changes. Example, house struck by lightning and electrical had to be rerouted with new electrical box. Company would not pay for this because it is considered an upgrade.
The explanation of coverage, or lack thereof, is a nice touch (I try to address certain things in an annual renewal letter), but I understand an agent who chooses not to do this, too. It’s an E&O thing. You can’t explain everything that’s excluded/covered to everyone, you’d have no time to do anything else. But once you start picking and choosing what to address, you leave yourself open to a E&O claim for the stuff you leave out. And you’d better explain the same stuff the same way to all your customers. The guy you leave out will be the one who has a claim denied, then you’ll have to explain why he didn’t get the letter you send to “all” your clients. Then again, maybe I’m just a little paranoid about lawsuits. Anyway, I’d much rather have the insurance company be required to make the discosures.
Wow, another page of paper to go out. Will this only cause carriers to leave the state since the premiums they collect from De. will not justify this new hoop they must jump through.
Since when did anyone think flood was covered by homeowners insurance???
Every time you turn around we hear more and more about how Government, be it Local, State or Federal, want’s to legislate the public from themselves as in this case. It seems to me that the largest problem folks face today is they expect a form of Government to bail them out if they made a wrong choice, bad investment or just plain screw up.
The Comm. from Del. is just one politician that promotes this way of life that “Big Brother” will take care of you , most of the time they are only looking to get reelected to their office or want to go for a higher office so they can continue to pander to those who expect they don’t have to be responsible for their own actions.
We have evolved to become a Society that believes that Government will take care of everything and that we have no responsibility to take care of ourselves. It is time we started being responsible for our own actions and quite blaming other or expect “Big Brother to bail us out .
Does New York have these types of discosures? Has it become more difficult for homeowner’s to get insurance on the east end of Long Island?