SEVERAL questions have popped up on my e-mail radar lately,arguing for or against the idea of placing the coverages of asingle account (either personal-lines or commercial) with multiplecarriers. Judging from the questions and various arguments pro andcon, I have to conclude a lot of folks (no doubt supported bycarrier-marketing hype) still believe in the “magic bullet”: thatone carrier, coverage form or policy always wins the day.

“Which is the right policy for this auto-related insured, agarage policy or CGL?”

“Isn't the DOC attached to a BAC a better coverage solution forfamily members than the extended coverage endorsement attached tothe PAP?”

“A tenant should cover his lease-based assumption of risk forbuilding damage under a single policy in which the landlord isnamed as an insured–right?–rather than have the landlord and tenanteach cover it in separate policies.”

It seems agents always are searching for the “Holy Grail,” asimple, incontrovertible answer for all complex coverage questions.And in truth, there is such an answer. It cuts through the clutterand gets right to the heart of the matter. That answer is: Itdepends.

If that bothers you, consider my recent experience in theclothing world. It started with the good news that four guestsingers were going to join our church's gospel quartet in a week ofperformances for our Christmas program. The bad news was that ourdirector wanted us to dress in tuxedos.

Unlike those of you who regularly don the black tie for powerbanquets and hobnobbing with royalty, I've worn a tuxedo exactlyfive times in my life: for four weddings and a formal dinner. Eachevent required me to wear formal dress for just a day; therefore Irented tux on each occasion. Now, however, I would need a tuxedofor a full week, rendering the renting option ridiculous. I neededto buy.

I am not what one would call a “standard” size. Every measurableportion of my anatomy falls outside the parameters clothing makersrely on when creating the typical store-rack sizes. Like others ofmy ilk, I have learned to just make do with whatever comes closestto my measurements.

As I stood in the store, figuring out which tuxedo ensemblemight approximate my correct size without jeopardizing the dashingappearance our choir director desired, a sales clerkapproached.

“Find what you need?” he asked pleasantly.

“Just checking the sizes,” I replied.

“The one you're holding looks great to me. We also have somenice shirts on sale today. I'll be over by the register when youhave everything you need.” Then he walked away, stranding me in ahell of lapels and cummerbunds.

I pressed on, trying out various coats. One size was a bit snugin the shoulders. Another fit adequately as long as I never had tobutton it. I had just about decided to go with the “buy it large,at least it will be comfortable” technique when a differentsalesperson approached.

“Need some help with the fit?” he asked.

After a bit of discussion about my fitting woes, he pulled acoat from the rack, told me to put it on and pulled out a tapemeasure. Within a few minutes, he had determined my sleeve lengthand neck circumference. He asked me how the tuxedo fit as I walkedor raised my arms, and as I buttoned and unbuttoned the jacket. Insome spots he marked the clothing with chalk, in others he stasheda few pins. He repeated the process with the pants.

“When do you need these?” was his last question.

“Next Monday,” I replied.

“Fine, we can do that,” he said. “Let me take the coat and pantswith my markings and pins. You pick out anything else you need togo with these, and bring them to me over at the counter.”

Ten days later, I stood in from of a 28-foot Christmas tree withseven other folks, singing my heart out and looking good!

Just like finding well-fitting clothing, coming up with theproper coverage for some clients is relatively cut-and-dried. Manymore of us, however, are subject to a myriad of variables andcoverage considerations, yet are often stuffed into preformattedcoverage forms and packages–usually for no other reason than thatis what the agent sells everyone else. And just like us “odd-size”folks who thought we had to settle for what we could find on theclothing rack, those clients may not realize the value of an agentwho knows how to properly tailor coverages. When they meet one,they learn how wondrous a customized fit is.

As in the clothing industry, events seem to have conspiredagainst the tailors of the insurance world. In the last few years,some carriers have seemed determined to eliminate the insuranceagent's value to clients. They didn't do this by writing coveragedirect, cutting commissions or raising production quotas. Rather,they greatly expanded the eligibility and underwriting rules forpackage policies that threw in the proverbial kitchen sink inregard to coverages and limits.

Not many years ago, properly pre-paring a proposal andsubmission for Main Street accounts required a knowledge of thespecial multiperil policy. (Remember SMPs?) It took multiple toursthrough the commercial-lines manuals, where you'd search forcoverages, proper codes, minimum premiums per line, increasedlimits factors and state modification factors.

Then along came a simplified, comprehensive coverage packagethat could be rated and underwritten from a card you could carry inyour back pants pocket–the businessowners policy. Coverages thatpreviously were unavailable or considered esoteric (unlimitedbusiness income for up to 12 months of interruption, for example)were now standard inclusions. Many agents thought they had died andgone to heaven. They raced throughout the countryside, “bopping”the multitudes in less time than it previously took to fullydevelop the rates for a single risk. Such agents can be forgivenfor thinking a new era had arrived in which sales volume ruled overtechnical expertise and in which underwriting was soon to become anobsolete art. |

Imagine you are playing the home version of “TrivialPursuit–Insurance Edition,” and the following question came up foryour final pie slice: What did ISO do in the early 1980s that wouldprofoundly affect how agents sold insurance for decades to come?Most probably would answer, “Introduce the claims-made CGL.” Iwould disagree. The ultimate paradigm-shifting event was ISO'smassive expansion of the commercial property class-rate program. Itwas the insurance equivalent of having the Bible translated fromGreek and Latin into the common tongues. Literally over-night(after the expiration of the for-those-days mandatory transitionprogram, of course), thousands of prop- erty risks that previouslyhad been ratable only after consulting voluminous rate pages werecondensed into a few predefined rating categories. Whereasdeciphering the abbreviations and codes of the specific rate cardsonce was a highly valued art practiced by insurance adepts, nowmere mortals could easily arrive at “proper” rates without knowinganything beyond the most basic information. The barbarians were atthe gates!

Yes, friends, the kingdom of insurance entered the“buy-off-the-rack” era, with all the drawbacks that connotes.Certainly, there are clients who can get a perfect fit bypurchasing a BOP or other standard package policy. If so,fantastic! Unfortunately, such policies also can tempt agents totake the path of least resistance. The sloppy salesperson risksbeing thrown in with all the charlatans who insist a suit looksswell, no matter how bad the fit or style for a specific customer.The ethical tailor, on the other hand, is not going to lie to aclient. But the wheat really separates from the chaff when thattailor also has the skill to perform alterations to turn an“adequate” article into one truly tailored to the unique needs ofthat client. The charlatan can but obfuscate, since all he knows iswhat he has to sell. He makes the client fit the clothing, whereasthe tailor makes the clothing fit the client.

The best insurance practitioners are great tailors. They knowtheir products and services intimately and recognize that each hasinherent strengths and limitations. They have honed their skillsand therefore have no fear of learning that certain clients falloutside common coverage or rating provisions. If a certain carrieror coverage fits a client perfectly, they go for it. But whenunique needs arise, the bold and few take out that tapemeasure.

Chris Amrhein is an insurance educator and speaker with more than30 years in the industry. He is also chief fun officer ofwww.insuranceisfun. com. Readers may contact Chris [email protected].