In the past few years, dozens of property/casualty insurers have announced innovative protections for risks involving new technologies, current economic concerns, personal and family relationships, home-based small businesses, and more.
“This is a new era in property/casualty insurance. Innovation is breaking out all over,” said Roger Hurtvig, president of the Insurance Innovation Institute (III) in Warwick, Rhode Island.
The P/C industry has a reputation of being slow to embrace new ideas but the III’s own measure of innovation — the P/C New Products Index — has been rising steadily for the past year and hit a record high of 75 out of a possible 100 points last month.
“It seems that with every day comes a new idea,” Hurtvig said. “The new products are anchored in traditional insurance principles but they speak to a new generation of risks. It’s very exciting.”
So what are some of these new ideas that have put the industry’s unhip reputation at risk? Insurance Journal searched the database at www.MyNewMarkets.com to find the Top 10 Most Innovative P/C Insurance Products:
1. Pay-As-You-Park: Private passenger auto policy from Progresso. Rates are based on how long the vehicle is not driven. Policyholders are sent a small white box that attaches to the front driver’s side wheel. The box contains a meter that is loaded with an initial estimated premium. The box calculates premium discounts for every 15 minutes the vehicle is parked but adds surcharges for every 15 minutes the vehicle is in motion. Pay-As-You-Dock boat policy also available.
2. GreenMaker: R.W. Barkley is selling a product liability policy for home or garage-based businesses that manufacture cosmetics, clothing, jewelry, toys, computers or other products using primarily recycled, upcycled, natural or organic materials.
3. Commercial Specific Liability (CSL): A low-cost option to the Commercial General Liability (CGL), the CSL lets business owners specify the exposures they want covered. The final ISO form is not expected until December but some examples of actions expected to be covered include: nailing into a water pipe, electrical wiring or cable; causing a fall due to the failure to warn of water, change in elevation (a step), or intoxication; and releasing a pollutant that the insured did not bring to the job site.
4. Vanishing Coverage: A multi-year package policy from Hubb Insurance available only to owners of high-end coastal properties and antique autos. The premium is lowered by the same amount the deductible is raised each year until the deductible reaches the policy limit or the premium hits zero, whichever happens first.
5. Home Business Interruption Protection (HBIP): Revelers Insurance has a business interruption policy for any service business conducted from the home, from hackers and day traders to massage therapists and insurance agents. Covers loss of Internet connection, telephone service, daycare, HVAC as well as refrigerator breaks.
6. No-Show Coverage: There is coverage for shoddy work, but what about when the plumber, electrician, roofer or other contractor doesn’t even show? Handover Insurance now covers damage caused by old pipes, leaky roof or other conditions that did not get fixed on schedule as promised.
7. Global Scoring: Chartus has developed a policy that guarantees to convert its auto and home policyholders’ credit scores to whichever foreign currency presents their financial history in the most favorable terms.
8. Relationship Breakdown: Hartford Stream coverage is triggered after two lovers break up and remain separated for more than three months. Pays 50 percent of the cost of unreturned gifts including rings and other jewelry; moving expenses; temporary housing; damaged or lost goods; up to $50,000 for reputational damage.
9. Homeworkers’ Compensation: The Harmfort’s injured worker coverage is specific to hazards of the home-based workplace. Includes injuries related to solitary worker syndrome, excessive weight gain, unnatural pet attachment, and deterioration of driving skills.
10. Hoosier Daddy Policy: An Indiana insurance company has launched a policy that protects a family’s income while the breadwinner is imprisoned for financial crimes. Not currently available to Wall Street executives or public officials in New Jersey, Illinois or Louisiana.
Since this article first appeared, Insurance Journal readers have alerted us to additional innovative products including:
Pet Peeve: Homeworkers’ Compensation and Home Business Interruption programs are great additions to a program for Pet Peeve Coverage. Pet Peeve Coverage is a reimbursement product for expenses such as humane society fines for dogs that escape and get caught, obedience training for dogs that refuse to come when called, upholstery charges for when a cat uses a favorite chair as a scratching post and other expenses related to erratic pet behavior.
Cell Phone Anguish: Coverage for loss of use coverage for cell phones. The policy indemnifies the named insured for losses due to a cell phone running out of battery. The insured must prove the loss occurred because they were unable to use the phone. Coverage includes reimbursement for gas or taxi when family members cannot contact insured for pickups of dinner or grocery items. Coverage is broad enough to include mental anguish due to drop calls and no coverage areas.
Editor’s Note: This special report originally appeared on www.InsuranceJournal.com on April 1, 2011. This article also appeared in Insurance Journal’s Satire Issue, August 15, 2011. The content is not real and is not to be taken seriously. It’s supposed to be humorous. Seriously.
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