This is a perfect example of agents failing to fulfill their responsibility to educate their clients. I have seen time and time again, agents who take zero time learning about their client’s individual needs, just to get a policy issued. At their core, Agents shouldn’t be salespeople, they’re AGENTS (or a better word, advocates) for the interest of the people who trusted them to restore their standard of living in the event of a catastrophe.
The only reason for customers not understanding the basics of their homeowner’s policies (such as guaranteed replacement v.s. extended replacement, cost per square foot to rebuilt, etc.) is the AGENT’s desire for a sale winning out over their desire to protect their client.
Unfortunately, most agent’s are woefully under-educated themselves (thanks to online ed courses; for example 50 hours of CE can be completed in about 4.5 hours….I know ‘cuz I did it myself). Often times the onus of properly insuring a client gets passed around so much, the time they learn about what their policy covers is when they call the claims department in the middle of the night only to hear “I’m sorry, but we can’t help you…”
Better insurance through better education.
Thus endeth the rant.
The home insurance calculator on their site is a giggle. All the user has to enter is the $ per square foot and the square feet and the all powerful computer will calculate the $.
I’m sure their partner carriers would be happy to accept this credible calculation.
to figure out that the average person doesn’t know squat about insurance coverage? And while I agree the agent has a responsibility to instruct the insured, try to get your average guy to sit still for insurance coverage 101. People don’t want to hear it. Look at all the folks in Ca. w/o earthquake insurance – we all know the big one is coming, but have they bought insurance? Noooooooo, it won’t happen to them. turkeys.
I will agree with you to a point. However, ultimately the consumer is responsible for what they purchase & sign. I can’t tell you how may people have just wanted to save $$, could care less what quote provided better coverage, etc. I can talk with some insureds until I am blue in the face and they still don’t grasp the concept of insurance – simply beacuse they don’t want to & think that they are paying you to be the agent & cover their A**. Agents can only go as far as the insured’s allow. We explain, we try to change/modify coverage to make more things covered for them, give them higher limits, etc. but for may people it comes down to the Almighty Dollar. It’s frustrating!!!
It’s sad really. So many don’t even think about insurance until they need it.
I agree w/DK that is it our responsibility and I also agree with you. Not only will they not sit down for insurance 101 they also want the least expensive thing they can find.
We can point out all the difference in policies all day long but what it really boils down to is price. If you ask them about their coverage most of them will tell you that’s what I have an agent for.
People need to be responsible for themselves. After all this is a contract they are signing and I often remind them of that.
This weekend I heard an interview in which an “authority” stated that Oprah was viewed by more than 50% of the population as being one of the most influential people on the planet. This probably explains why over half the population doesn’t know what is covered by their homeowner policy – Oprah’s never had a show devoted to homeowner insurance.
Yes, insurance is bought during the best of times and used during the worst of times.
We recently had a large tornado go through not too far away. Now all of a sudden everyone wants to review their coverages since they’ve heard horror stories. Of course that window will go away in the next few months and people won’t be worrying about it.
My point is, as an agent I can choose to not sell insurance to someone who refuses to be covered properly.
My goal is not to sell a policy but to protect a client. If they won’t accept coverage that adequately takes in all of their needs, my agency can’t take that responsibility for them. I don’t pay my E& O to protect their ignorance, but my own. The almighty dollar is only as strong as one’s weakest convictions.
DK I agree 100% and our agency does the same thing. We have pretty high guidelines and if a customer does accept those then we don’t insure them.
It is our responsiblity to educate our clients but for every one that appreciates what you do for them you have two or three that don’t. Again they also need to be responsbile for themselves and need to be informed about what they are buying.
We can only do so much to help educate them but they also have to be responsible for their own coverage as well.
As a claims executive, I’ve seen firsthand the value an agent can add to the insurance transaction. A really good agent will not just talk about what is covered, since those issues are never problematic. He/she will make sure the client knows what isn’t covered, or what special limits could be troublesome. If someone rejects an agents advice, all the agent can do is document the file with a note confirming the rejection.
Unforutnately, the internet is a serious threat to the future of the professional agent. Auto and homeowner insurance is being commoditized and can by had electronically. Buyers need to educate themselves, not simply “assume” by buying a policy they’re covered for everything. Since a home is the largest purchase someone will make in their lifetime, I have no sympathy for anyone who doesn’t take the interest and time to learn about homeownwers insurance. There are no acceptable excuses for not doing so.
Hardly anybody will sit down with me, its all about price. IF I can get them to sit down with me, I have to make it short and to the point or their eyes will start glaze over and I know they are somewhere else in their mind. After Katrina I called a radio station to inform them that it’s not all the agents and companies fault, that people are always too busy. After I hung up the phone I heard allot of jokes about how I would have to be here 15 hours a day to explain all that to people. I called the station back and said “Yeah, Im here 15 or more a day, and I still cant get people to listen, the only ones standing between my clients and financial disaster are my staff and I. The proper Risk Management program isnt bought – its sold!
Get off your sanctimonious, nauseating azz! Your goal is to sell policies and make commission, period. If along the way you protect client’s interest, then great. I’m not begrudging you this, but please admit it. This is why agents should have a sort of Claim Service Manager in their employ, so that the Agent/SALESMAN can “cut and release” and still have their client’s interests protected while they scour for new business.
Ah Reagan,
Thank you. It’s important to hear from that side of things. It’s an ancient argument, does the surgeon cut for a profit or to save. There are always two sides. Stay away from commenting on the holiness of my hindquarters and stick to what you know. The idea that you can assume the reason behind the “why” I entered the business is laughable. So you’re a salesman, that’s fine. Take the monicre of agent off your door then, and don’t use the guise of bing helpfull to line your pockets.
Your post reminds me of the Northridge quake. In the days following that quake, we received over 50 calls from people wanting earthquake coverage. Of course we were in moratorium at the time but made a list of those inquiring with a promise to follow up when the moratorium was lifted. Once it did, we worked the list, diligently. We made multiple attempts to call people, those we didn’t get by phone, we sent two letters to.
Of all that list, TWO clients bought it. Of those we reached by phone, the refrain was the same… “Oh, it’s too expensive!” Of those we sent letters to (about 30%) we received ZERO calls back… ZERO!
After the Northridge quake, MANY of the uninsured idiots who suffered losses sued their agents swearing their agents never offered them earthquake. When confronted with signed rejections, the lie was the same… “My agent FORGED my signature.”
You can lead an idiot to coverage, but you can’t make them THINK!
Mr. Kennedy refers to a policyholder as idiots. I’m assuming, and we all know what assumes means, that Mr. Kennedy is an insurance agent and this is his way of referring to his clients. This is the current state of the insurance industry, greedy, obnoxious, opinionated,wanting to collect the premium, on time, not late, and not service their client. Just my opinion
The year you wrote their HO’s policy you may have done an excellent job. But people don’t remember details after a year or so & things change.The only way to continue “good agent” care is the hard way: ie: routine policy reviews face to face w/ the client, or at least by phone or email. The upside is they trust you, and will buy more insurance from you if you do this. Also find ways to help them avoid claims and be good premium payors so the coverage you did sell them will at least be in force at the time of loss. You have to teach them how to be good insureds too. As the article shows, they need advice.
This must be a sore subject DD. Most of the agents I know are respectful of their clients and represent them well. The ones that will not listen are idiots. Some people just won’t listen. You sound like one of them.
Perhaps I was a bit harsh calling them idiots, perhaps misguided is a better term. However, despite my best attempts, too many people still refuse to purchase proper coverage.
Just last Friday, guy has two homes, his primary and a rental and got MAD at me for pointing out that he should carry more than the state-mandated minimum liability on his autos. After all, he was calling to try to reduce his premium. Guess what, he told me I was greedy and just trying to jack up my commissions. After all (his words now) “*I* am not going to have an accident!”
GUARANTEED, if he were to lose it all because he runs over a kid in a crosswalk, he sues me claiming he didn’t know he was underinsured.
Not sure why you are an insurance hater DD, don’t know what you do for a living or perhaps you are just one of those people upset that you pay premiums and never get anything out of it, like it’s an investment or something. I do, however, have 3 pages of disclosures waiting to protect me from you.
See, I live in California where the state motto is “not my fault”. Not MY fault I borrowed too much for a house I can’t afford! Not MY fault I refused to buy much needed earthquake protection! Not MY fault my kids are in a gang! Not MY fault I am behind on my bills. After all, every one of my kids HAS to have a cell phone and I HAVE to drive a new car like my neighbor… But *I* am not the one who is greedy, it’s those big, bad corporations who did this to me.
Nice backtracking, Kennedy! You almost sell me on it. But after re-reading your post, I realize it wasn’t YOUR fault. It was all the people who refused to buy insurance from you that put you in such a pissy mood. And that is very surprising, considering your pleasant personality. Bad idiots!!!
Posted On: August 18, 2008, 2:35 pm CDT
Posted By: Kevin Kennedy
“GUARANTEED, if he were to lose it all because he runs over a kid in a crosswalk, he sues me claiming he didn’t know he was underinsured.”
I hear ya Kevin!
I too am a Calif Agent. Last week I received a call from an insured regarding his homeowner insurance. He told me he was confused because he received two policies in the mail after purchasing his his home. After some discussion it became evident that despite his agreement to purchase the policy from us and the directions of his escrow company for us to issue said policy, he purchased a different policy two days after ours was issued. The one we issued was a comprehensive homeowner policy with guaranteed replacement cost on the dwelling, replacement cost on PP, all perils/named exclusions etc…
The policy he purchased on his own was a basic dwelling fire policy at ACV, named perils only, no theft coverage and ACV on pp etc…
He asked me to cancel my policy at which time I explained the coverage difference and afterwards he said “thanks, but go ahead and cancel my policy with you”. I told him I need the request in writing and mailed him a 2-page disclosure listing the policy differences and specifically stating that he was “with full knowledge and understanding” of the coverage difference in the two policies, choosing to cancel the policy offering the superior coverage. When he got the letter he read it and calls me angrily asking “what the heck is this??” I told him that if his house burns to the ground and he is left in financial trouble due to a gap or lack of coverage, I do not wish to be sued claiming that I cancelled the better policy without his permission and that he had every intention of keeping my policy and canceling the other. He reluctantly signed the disclosure but at least it made him think,and I have peace of mind knowing that I did all I could.
I have had many clients change their mind when buying homeoenwer insurance by putting quite blunt language in the disclosures so that they buy based on coverage and not on price alone. Someone buying a $500,000 home who purchased a DP1 policy to protect it is really not a client I wish to have in my book but if they sign the disclosures I’ll take them and they can’t say I never warned them.
Kevin I agree with you completly. I am not an insurance agent, but i do work in the insurance field. While I do believe a good agent will advise their clinets on proper coverage, I don’t agree that it’s the agents responsibility to push a policyholder into buying certain coverage. It its my house, I think I am the one responbile for making sure i’m adequately covered. The measn reading policy documents, asking intelligent questions, and determining what is best for me.
I agree in today’s society everyone wants to place the blame on someone else. Why would it be anyone elses responsibility but your own if you are not covered. You have the policy docuements, read them. If you can’t understand them, ask someone about them. If you’re not covered in a loss it’s no ones fault but your own
WHAT ABOUT THE AFFLUENT ATTORNEY FROM MISSISSIPPI WHO WAS A US SENATOR AND HAD HIS GULFCOAST HOME DESTROYED BY KATRINA, AND DID NOT UNDERSTAND HE HAD NO FLOOD INSURANCE?
I must say you are mostly right. But most of the time it is not the Agent who did not explain the information properly, but it is the client not listening to what we are explaining. Also a lot of the times some clients are willing to save a buck and just go online to purchase there CHEAP insurance policy that these direct companies write for them. The direct companies care nothing about the clients well being or protecting the clients assests. Just about making money. Maybe all of these people that took this survey are the same people who buy direct and have never set down with an agent and had there coverages explained to them. I say you get what you pay for.
I have yet to have an agent not ask for a coverage comparison when I go shopping for insurance. They have all wanted to compare apples to apples.
That being said, the longer I have my policy, even with reviews annually on renewal, the less I know about it. I just don’t try to remember it because my agent keeps up with my needs. That’s one of the lesser known perils of having a good agent – they take such good care of you that you start to focus on other things. My fault for not keeping up on it, but at least I know where the blame lies – good customer service!
This is my last comment on the subject, I promise.
The “apples to apples” comparison is one of the best examples of poor customer service.
Your life changes, shouldn’t your insurance change with it? A home that cost $150/square foot 5 years ago has increased exponentially with the high cost of fuel, copper, lumber, etc. This means your dwelling coverage is horribly out of date if you are just changing an apple for a cheaper apple. This is especially true of floater policies. No one ever gets new appraisals, and agents don’t require them, they’ll use whatever schedule the previous insurance company used, and everyone thinks they’re happy.
A good agent, is a forward thinking agent. “What’s going to happen in the event of a claim?” should be on the forefront of their mind. Most people who have been told by their agents “Let’s compare apples to apples” are price driven, and end up tragically undercovering their clients.
Ask yourselves this question: when was the last time your agent was in your home, and had a hands on look at the precious lives and belongings they are promising to cover?
In the land of Zillow, an agent can start to think they can conduct business from the comfort of their offices and never get to truly know what their clients actual needs are.
My point exactly. To both of your response. In our office our Customer Service people always send out renewal questionaires to see if there has been any changes to the home and to ask if they need any additional coverages such as Flood, Earthquake or more Jewely coverage, Also on any new account, we never compare Apples to Apples. On a home policy there is no such thing. We refigure everyones home insurance based upon there current information not what they are currently insured for. This was changed a few years ago when companies starting needing all new replacement information. If agents are doing this and just matching coverages then there looking for a E & O claim. We don’t live in a perfect world so there is always going to be someone who said we did not offer something. We now are starting to have them sign something stating what we did offer. At least it is some protection. I still say these online companies selling auto and home insurance should be banned and done away with. No one should purchase insurance to protect there assests on the internet. No agent is there to explain what you are purchasing.
DK, you’re making a lot of assumptions about agents that others shop with. A good insurance shopper will compare what’s being offered from several agents and work their way toward the coverage they need/want. I must have gone through half a dozen policy revisions to make sure that all the policies I was comparing covered the same things. Then I could compare based on price and intagibles (service, convenience, etc). But I was doing a true “apples to apples” comparison because every policy covered what I needed covered.
Dread, you are so correct about commoditizing insurance. There has been a trend to quantify insurance so it can be moved around like tangible “products” to help measure it, analyze it, and sell it. In fact, my kid bought insurance over the internet and was really proud that he was able to “quote. buy. print” but when I asked him what his limits and deductibles were and what they represented, he didn’t know but buying on the internet was “soo cool!”. I am not sure how this will all shake out when a catastrophe hits but you can bet there will be gnashing of teeth and wailing in the streets a la Katrina and the industry will be getting another black eye where insureds are really at their own fault.
Most homeowner’s are looking for the best price for home insurance. It limits their ability to understand their coverages and optional coverages they can select with consumers being so price driven. Many agents know they would be wasting their breath if the insured is not going to listen and just be priced focus. Agents need to sell to make a living so they will put the endorsements on that they feel is in the customers best interest like replacement cost value. Consumers need to care more about their protection. They make the ultimate decision on the purchase. They need to want to listen, care, and sit down with an agent. It is something that takes time not a phone call to an agent saying I am shopping for a better price.
I have been a faithful reader of Insurance Journal on line for many years and I believe that this subject has had the greatest number of responses that I can remember. I am not an agent or adjuster but I do have a chip in the game. Number one, insurance carriers are not in the disaster recovery business, they are in the finance business. Prior to the internet most insurance was sold over the telephone unless you were with a premium carrier such as Chubb, AIG and others. No visit by the agent. Everything based on percentages. If you were a first time home buyer you probably called your parent and asked what company they used! Or you called your existing agent when you were buying a new house and his first question usually is Has the house been appraised by the mortgage company yet? Using the appraised value of real estate transaction is not the right way to underwrite the replacement value of the house (schedule A) and using a percentage of schedule A to determine the contents (schedule C) value coverage is out of date and a joke. And using drive by appraisals that cost the carrier $35 a piece to determine the ucrrent value of schedule A is not right either. But time is money!
What the industry needs to do is get both the homeowner and agent to both participate in the actual underwriting process. And I asgree with others that the homeowner needs to step up and be proactive. And a home inventory booklet that the carrier provides is not going to cut it anymore. Certainly Katrina made sure of that! All we have heard about is the homes that have been lost (shelter our number one need) but what good is a home when you having nothing to put inside of it? For those readers who follow Insurance Journal you will know what company I’m with in the next three to four months because we are going to provide a professional and affordable solution to the insurance to value issue that faces all homeowners throughout North America.
This article was intended not to point out obvious theories about customer understanding of insurance policies to well versed insurance professionals; but instead to target homeowners and point out realities about insurance policies they often overlook- purposely or unintentionally.
What’s more shocking about the statistics when you look closely is that those surveyed are the homeowners who actually took the time to answer the survey question- more likely informed consumers and not just penny pinchers looking for a quick, low rate. And of the informed consumers, there was still a shocking 54 percent that admitted to knowing hardly anything about their policy.
Is it ultimately the consumer’s responsibility to understand their coverage? Of course! A consumer of any product/service carries that responsibility. However, the devastating effects of misunderstanding a home insurance policy are apparent everyday.
While many homeowners DO purchase the least expensive policy available with little regard to actual coverage, is it not still the agent’s responsibility to try and recommend the best coverage?
I believe it is. The agent should be an advocate for the customer, before the company. And while you can not make all insurance consumers WISE insurance consumers- you can at least try to best prepare them for a disaster that no one ever expects.
Maybe these sound like lofty ideals to you, but don’t we all want to sleep well at night?
Dear CVanBrunt and Interested party, You are just stating the obvious. Yes, we are supposed to be there to take care of our clients and you are correct, the consumer is always right. Are you an agent? If you are then do you set down with your customers and explain all of the coverages. I know we do at our agency. I was merely stating that all agents should do that. However the internet purchasers, whoever they are, have no one to explain coverages. It is not a consumers responsibility to know exactly what they need. They need an agent to go over what coverages are available and compare it to what they have currently. Why do you think we have a license and schooling to sell insurance? Would you preform your own surgery too if you you went online and it explained how you could? Nothing is perfect. We don’t live in a perfect world. But when push comes to shove it is still the agents job to sit down and explain to your customer the coverages they have available to them. Price is pushed way too much by advertising. You get what you pay for and for a lot of the people from Katrina. They were never explained to what they have or don’t have.
We had a recent large amount of flooding here in Indiana and can you believe long time agents told there clients that they could not purchase flood insurance. Probably because some agent out there was too lazy to look it up to see if there client could or could not. So guess what. The client lost there home and contents and because they knew me they came to me asking questions. I explained that was in correct but now it was too late. I have there insurance now but I can’t help get them coverage for the past. So all you agents out there. When is the last time you helped someone by sitting down with them like agents used to do?
You have to be living under a rock if you still think flood is covered under a homeowners after all the articles on the subject.
Not to mention the NATIONAL ad campaign put on by the Federal government.
This is a perfect example of agents failing to fulfill their responsibility to educate their clients. I have seen time and time again, agents who take zero time learning about their client’s individual needs, just to get a policy issued. At their core, Agents shouldn’t be salespeople, they’re AGENTS (or a better word, advocates) for the interest of the people who trusted them to restore their standard of living in the event of a catastrophe.
The only reason for customers not understanding the basics of their homeowner’s policies (such as guaranteed replacement v.s. extended replacement, cost per square foot to rebuilt, etc.) is the AGENT’s desire for a sale winning out over their desire to protect their client.
Unfortunately, most agent’s are woefully under-educated themselves (thanks to online ed courses; for example 50 hours of CE can be completed in about 4.5 hours….I know ‘cuz I did it myself). Often times the onus of properly insuring a client gets passed around so much, the time they learn about what their policy covers is when they call the claims department in the middle of the night only to hear “I’m sorry, but we can’t help you…”
Better insurance through better education.
Thus endeth the rant.
The home insurance calculator on their site is a giggle. All the user has to enter is the $ per square foot and the square feet and the all powerful computer will calculate the $.
I’m sure their partner carriers would be happy to accept this credible calculation.
to figure out that the average person doesn’t know squat about insurance coverage? And while I agree the agent has a responsibility to instruct the insured, try to get your average guy to sit still for insurance coverage 101. People don’t want to hear it. Look at all the folks in Ca. w/o earthquake insurance – we all know the big one is coming, but have they bought insurance? Noooooooo, it won’t happen to them. turkeys.
I will agree with you to a point. However, ultimately the consumer is responsible for what they purchase & sign. I can’t tell you how may people have just wanted to save $$, could care less what quote provided better coverage, etc. I can talk with some insureds until I am blue in the face and they still don’t grasp the concept of insurance – simply beacuse they don’t want to & think that they are paying you to be the agent & cover their A**. Agents can only go as far as the insured’s allow. We explain, we try to change/modify coverage to make more things covered for them, give them higher limits, etc. but for may people it comes down to the Almighty Dollar. It’s frustrating!!!
It’s sad really. So many don’t even think about insurance until they need it.
I agree w/DK that is it our responsibility and I also agree with you. Not only will they not sit down for insurance 101 they also want the least expensive thing they can find.
We can point out all the difference in policies all day long but what it really boils down to is price. If you ask them about their coverage most of them will tell you that’s what I have an agent for.
People need to be responsible for themselves. After all this is a contract they are signing and I often remind them of that.
This weekend I heard an interview in which an “authority” stated that Oprah was viewed by more than 50% of the population as being one of the most influential people on the planet. This probably explains why over half the population doesn’t know what is covered by their homeowner policy – Oprah’s never had a show devoted to homeowner insurance.
Yes, insurance is bought during the best of times and used during the worst of times.
We recently had a large tornado go through not too far away. Now all of a sudden everyone wants to review their coverages since they’ve heard horror stories. Of course that window will go away in the next few months and people won’t be worrying about it.
My point is, as an agent I can choose to not sell insurance to someone who refuses to be covered properly.
My goal is not to sell a policy but to protect a client. If they won’t accept coverage that adequately takes in all of their needs, my agency can’t take that responsibility for them. I don’t pay my E& O to protect their ignorance, but my own. The almighty dollar is only as strong as one’s weakest convictions.
DK I agree 100% and our agency does the same thing. We have pretty high guidelines and if a customer does accept those then we don’t insure them.
It is our responsiblity to educate our clients but for every one that appreciates what you do for them you have two or three that don’t. Again they also need to be responsbile for themselves and need to be informed about what they are buying.
We can only do so much to help educate them but they also have to be responsible for their own coverage as well.
As a claims executive, I’ve seen firsthand the value an agent can add to the insurance transaction. A really good agent will not just talk about what is covered, since those issues are never problematic. He/she will make sure the client knows what isn’t covered, or what special limits could be troublesome. If someone rejects an agents advice, all the agent can do is document the file with a note confirming the rejection.
Unforutnately, the internet is a serious threat to the future of the professional agent. Auto and homeowner insurance is being commoditized and can by had electronically. Buyers need to educate themselves, not simply “assume” by buying a policy they’re covered for everything. Since a home is the largest purchase someone will make in their lifetime, I have no sympathy for anyone who doesn’t take the interest and time to learn about homeownwers insurance. There are no acceptable excuses for not doing so.
Hardly anybody will sit down with me, its all about price. IF I can get them to sit down with me, I have to make it short and to the point or their eyes will start glaze over and I know they are somewhere else in their mind. After Katrina I called a radio station to inform them that it’s not all the agents and companies fault, that people are always too busy. After I hung up the phone I heard allot of jokes about how I would have to be here 15 hours a day to explain all that to people. I called the station back and said “Yeah, Im here 15 or more a day, and I still cant get people to listen, the only ones standing between my clients and financial disaster are my staff and I. The proper Risk Management program isnt bought – its sold!
DL,
Get off your sanctimonious, nauseating azz! Your goal is to sell policies and make commission, period. If along the way you protect client’s interest, then great. I’m not begrudging you this, but please admit it. This is why agents should have a sort of Claim Service Manager in their employ, so that the Agent/SALESMAN can “cut and release” and still have their client’s interests protected while they scour for new business.
Ah Reagan,
Thank you. It’s important to hear from that side of things. It’s an ancient argument, does the surgeon cut for a profit or to save. There are always two sides. Stay away from commenting on the holiness of my hindquarters and stick to what you know. The idea that you can assume the reason behind the “why” I entered the business is laughable. So you’re a salesman, that’s fine. Take the monicre of agent off your door then, and don’t use the guise of bing helpfull to line your pockets.
I love it, I really do.
Your post reminds me of the Northridge quake. In the days following that quake, we received over 50 calls from people wanting earthquake coverage. Of course we were in moratorium at the time but made a list of those inquiring with a promise to follow up when the moratorium was lifted. Once it did, we worked the list, diligently. We made multiple attempts to call people, those we didn’t get by phone, we sent two letters to.
Of all that list, TWO clients bought it. Of those we reached by phone, the refrain was the same… “Oh, it’s too expensive!” Of those we sent letters to (about 30%) we received ZERO calls back… ZERO!
After the Northridge quake, MANY of the uninsured idiots who suffered losses sued their agents swearing their agents never offered them earthquake. When confronted with signed rejections, the lie was the same… “My agent FORGED my signature.”
You can lead an idiot to coverage, but you can’t make them THINK!
Mr. Kennedy refers to a policyholder as idiots. I’m assuming, and we all know what assumes means, that Mr. Kennedy is an insurance agent and this is his way of referring to his clients. This is the current state of the insurance industry, greedy, obnoxious, opinionated,wanting to collect the premium, on time, not late, and not service their client. Just my opinion
The year you wrote their HO’s policy you may have done an excellent job. But people don’t remember details after a year or so & things change.The only way to continue “good agent” care is the hard way: ie: routine policy reviews face to face w/ the client, or at least by phone or email. The upside is they trust you, and will buy more insurance from you if you do this. Also find ways to help them avoid claims and be good premium payors so the coverage you did sell them will at least be in force at the time of loss. You have to teach them how to be good insureds too. As the article shows, they need advice.
This must be a sore subject DD. Most of the agents I know are respectful of their clients and represent them well. The ones that will not listen are idiots. Some people just won’t listen. You sound like one of them.
Perhaps I was a bit harsh calling them idiots, perhaps misguided is a better term. However, despite my best attempts, too many people still refuse to purchase proper coverage.
Just last Friday, guy has two homes, his primary and a rental and got MAD at me for pointing out that he should carry more than the state-mandated minimum liability on his autos. After all, he was calling to try to reduce his premium. Guess what, he told me I was greedy and just trying to jack up my commissions. After all (his words now) “*I* am not going to have an accident!”
GUARANTEED, if he were to lose it all because he runs over a kid in a crosswalk, he sues me claiming he didn’t know he was underinsured.
Not sure why you are an insurance hater DD, don’t know what you do for a living or perhaps you are just one of those people upset that you pay premiums and never get anything out of it, like it’s an investment or something. I do, however, have 3 pages of disclosures waiting to protect me from you.
See, I live in California where the state motto is “not my fault”. Not MY fault I borrowed too much for a house I can’t afford! Not MY fault I refused to buy much needed earthquake protection! Not MY fault my kids are in a gang! Not MY fault I am behind on my bills. After all, every one of my kids HAS to have a cell phone and I HAVE to drive a new car like my neighbor… But *I* am not the one who is greedy, it’s those big, bad corporations who did this to me.
Nice backtracking, Kennedy! You almost sell me on it. But after re-reading your post, I realize it wasn’t YOUR fault. It was all the people who refused to buy insurance from you that put you in such a pissy mood. And that is very surprising, considering your pleasant personality. Bad idiots!!!
Posted On: August 18, 2008, 2:35 pm CDT
Posted By: Kevin Kennedy
“GUARANTEED, if he were to lose it all because he runs over a kid in a crosswalk, he sues me claiming he didn’t know he was underinsured.”
I hear ya Kevin!
I too am a Calif Agent. Last week I received a call from an insured regarding his homeowner insurance. He told me he was confused because he received two policies in the mail after purchasing his his home. After some discussion it became evident that despite his agreement to purchase the policy from us and the directions of his escrow company for us to issue said policy, he purchased a different policy two days after ours was issued. The one we issued was a comprehensive homeowner policy with guaranteed replacement cost on the dwelling, replacement cost on PP, all perils/named exclusions etc…
The policy he purchased on his own was a basic dwelling fire policy at ACV, named perils only, no theft coverage and ACV on pp etc…
He asked me to cancel my policy at which time I explained the coverage difference and afterwards he said “thanks, but go ahead and cancel my policy with you”. I told him I need the request in writing and mailed him a 2-page disclosure listing the policy differences and specifically stating that he was “with full knowledge and understanding” of the coverage difference in the two policies, choosing to cancel the policy offering the superior coverage. When he got the letter he read it and calls me angrily asking “what the heck is this??” I told him that if his house burns to the ground and he is left in financial trouble due to a gap or lack of coverage, I do not wish to be sued claiming that I cancelled the better policy without his permission and that he had every intention of keeping my policy and canceling the other. He reluctantly signed the disclosure but at least it made him think,and I have peace of mind knowing that I did all I could.
I have had many clients change their mind when buying homeoenwer insurance by putting quite blunt language in the disclosures so that they buy based on coverage and not on price alone. Someone buying a $500,000 home who purchased a DP1 policy to protect it is really not a client I wish to have in my book but if they sign the disclosures I’ll take them and they can’t say I never warned them.
Kevin I agree with you completly. I am not an insurance agent, but i do work in the insurance field. While I do believe a good agent will advise their clinets on proper coverage, I don’t agree that it’s the agents responsibility to push a policyholder into buying certain coverage. It its my house, I think I am the one responbile for making sure i’m adequately covered. The measn reading policy documents, asking intelligent questions, and determining what is best for me.
I agree in today’s society everyone wants to place the blame on someone else. Why would it be anyone elses responsibility but your own if you are not covered. You have the policy docuements, read them. If you can’t understand them, ask someone about them. If you’re not covered in a loss it’s no ones fault but your own
WHAT ABOUT THE AFFLUENT ATTORNEY FROM MISSISSIPPI WHO WAS A US SENATOR AND HAD HIS GULFCOAST HOME DESTROYED BY KATRINA, AND DID NOT UNDERSTAND HE HAD NO FLOOD INSURANCE?
This article is SHOCKING. SHOCKING I tell ya!
I must say you are mostly right. But most of the time it is not the Agent who did not explain the information properly, but it is the client not listening to what we are explaining. Also a lot of the times some clients are willing to save a buck and just go online to purchase there CHEAP insurance policy that these direct companies write for them. The direct companies care nothing about the clients well being or protecting the clients assests. Just about making money. Maybe all of these people that took this survey are the same people who buy direct and have never set down with an agent and had there coverages explained to them. I say you get what you pay for.
I have yet to have an agent not ask for a coverage comparison when I go shopping for insurance. They have all wanted to compare apples to apples.
That being said, the longer I have my policy, even with reviews annually on renewal, the less I know about it. I just don’t try to remember it because my agent keeps up with my needs. That’s one of the lesser known perils of having a good agent – they take such good care of you that you start to focus on other things. My fault for not keeping up on it, but at least I know where the blame lies – good customer service!
This is my last comment on the subject, I promise.
The “apples to apples” comparison is one of the best examples of poor customer service.
Your life changes, shouldn’t your insurance change with it? A home that cost $150/square foot 5 years ago has increased exponentially with the high cost of fuel, copper, lumber, etc. This means your dwelling coverage is horribly out of date if you are just changing an apple for a cheaper apple. This is especially true of floater policies. No one ever gets new appraisals, and agents don’t require them, they’ll use whatever schedule the previous insurance company used, and everyone thinks they’re happy.
A good agent, is a forward thinking agent. “What’s going to happen in the event of a claim?” should be on the forefront of their mind. Most people who have been told by their agents “Let’s compare apples to apples” are price driven, and end up tragically undercovering their clients.
Ask yourselves this question: when was the last time your agent was in your home, and had a hands on look at the precious lives and belongings they are promising to cover?
In the land of Zillow, an agent can start to think they can conduct business from the comfort of their offices and never get to truly know what their clients actual needs are.
My point exactly. To both of your response. In our office our Customer Service people always send out renewal questionaires to see if there has been any changes to the home and to ask if they need any additional coverages such as Flood, Earthquake or more Jewely coverage, Also on any new account, we never compare Apples to Apples. On a home policy there is no such thing. We refigure everyones home insurance based upon there current information not what they are currently insured for. This was changed a few years ago when companies starting needing all new replacement information. If agents are doing this and just matching coverages then there looking for a E & O claim. We don’t live in a perfect world so there is always going to be someone who said we did not offer something. We now are starting to have them sign something stating what we did offer. At least it is some protection. I still say these online companies selling auto and home insurance should be banned and done away with. No one should purchase insurance to protect there assests on the internet. No agent is there to explain what you are purchasing.
DK, you’re making a lot of assumptions about agents that others shop with. A good insurance shopper will compare what’s being offered from several agents and work their way toward the coverage they need/want. I must have gone through half a dozen policy revisions to make sure that all the policies I was comparing covered the same things. Then I could compare based on price and intagibles (service, convenience, etc). But I was doing a true “apples to apples” comparison because every policy covered what I needed covered.
Then I went with an online agency – USAA.
Dread, you are so correct about commoditizing insurance. There has been a trend to quantify insurance so it can be moved around like tangible “products” to help measure it, analyze it, and sell it. In fact, my kid bought insurance over the internet and was really proud that he was able to “quote. buy. print” but when I asked him what his limits and deductibles were and what they represented, he didn’t know but buying on the internet was “soo cool!”. I am not sure how this will all shake out when a catastrophe hits but you can bet there will be gnashing of teeth and wailing in the streets a la Katrina and the industry will be getting another black eye where insureds are really at their own fault.
Most homeowner’s are looking for the best price for home insurance. It limits their ability to understand their coverages and optional coverages they can select with consumers being so price driven. Many agents know they would be wasting their breath if the insured is not going to listen and just be priced focus. Agents need to sell to make a living so they will put the endorsements on that they feel is in the customers best interest like replacement cost value. Consumers need to care more about their protection. They make the ultimate decision on the purchase. They need to want to listen, care, and sit down with an agent. It is something that takes time not a phone call to an agent saying I am shopping for a better price.
I have been a faithful reader of Insurance Journal on line for many years and I believe that this subject has had the greatest number of responses that I can remember. I am not an agent or adjuster but I do have a chip in the game. Number one, insurance carriers are not in the disaster recovery business, they are in the finance business. Prior to the internet most insurance was sold over the telephone unless you were with a premium carrier such as Chubb, AIG and others. No visit by the agent. Everything based on percentages. If you were a first time home buyer you probably called your parent and asked what company they used! Or you called your existing agent when you were buying a new house and his first question usually is Has the house been appraised by the mortgage company yet? Using the appraised value of real estate transaction is not the right way to underwrite the replacement value of the house (schedule A) and using a percentage of schedule A to determine the contents (schedule C) value coverage is out of date and a joke. And using drive by appraisals that cost the carrier $35 a piece to determine the ucrrent value of schedule A is not right either. But time is money!
What the industry needs to do is get both the homeowner and agent to both participate in the actual underwriting process. And I asgree with others that the homeowner needs to step up and be proactive. And a home inventory booklet that the carrier provides is not going to cut it anymore. Certainly Katrina made sure of that! All we have heard about is the homes that have been lost (shelter our number one need) but what good is a home when you having nothing to put inside of it? For those readers who follow Insurance Journal you will know what company I’m with in the next three to four months because we are going to provide a professional and affordable solution to the insurance to value issue that faces all homeowners throughout North America.
This article was intended not to point out obvious theories about customer understanding of insurance policies to well versed insurance professionals; but instead to target homeowners and point out realities about insurance policies they often overlook- purposely or unintentionally.
What’s more shocking about the statistics when you look closely is that those surveyed are the homeowners who actually took the time to answer the survey question- more likely informed consumers and not just penny pinchers looking for a quick, low rate. And of the informed consumers, there was still a shocking 54 percent that admitted to knowing hardly anything about their policy.
Is it ultimately the consumer’s responsibility to understand their coverage? Of course! A consumer of any product/service carries that responsibility. However, the devastating effects of misunderstanding a home insurance policy are apparent everyday.
While many homeowners DO purchase the least expensive policy available with little regard to actual coverage, is it not still the agent’s responsibility to try and recommend the best coverage?
I believe it is. The agent should be an advocate for the customer, before the company. And while you can not make all insurance consumers WISE insurance consumers- you can at least try to best prepare them for a disaster that no one ever expects.
Maybe these sound like lofty ideals to you, but don’t we all want to sleep well at night?
Dear CVanBrunt and Interested party, You are just stating the obvious. Yes, we are supposed to be there to take care of our clients and you are correct, the consumer is always right. Are you an agent? If you are then do you set down with your customers and explain all of the coverages. I know we do at our agency. I was merely stating that all agents should do that. However the internet purchasers, whoever they are, have no one to explain coverages. It is not a consumers responsibility to know exactly what they need. They need an agent to go over what coverages are available and compare it to what they have currently. Why do you think we have a license and schooling to sell insurance? Would you preform your own surgery too if you you went online and it explained how you could? Nothing is perfect. We don’t live in a perfect world. But when push comes to shove it is still the agents job to sit down and explain to your customer the coverages they have available to them. Price is pushed way too much by advertising. You get what you pay for and for a lot of the people from Katrina. They were never explained to what they have or don’t have.
We had a recent large amount of flooding here in Indiana and can you believe long time agents told there clients that they could not purchase flood insurance. Probably because some agent out there was too lazy to look it up to see if there client could or could not. So guess what. The client lost there home and contents and because they knew me they came to me asking questions. I explained that was in correct but now it was too late. I have there insurance now but I can’t help get them coverage for the past. So all you agents out there. When is the last time you helped someone by sitting down with them like agents used to do?