And what better way to speak of it than to respond to a plaintive cry uttered recently via e-mail from alert reader Rick, who penned the following missive: "I'd like to have you write a column sometime on The Top 10 Reasons Your Insureds Should Have Their Auto, Home and Umbrella with One Company. With your wonderful coverage-oriented mind, I'm sure you'll have a lot of ideas. Thanks, Rick."
Ah, Rick. You know the path to my heart; namely, totally gratuitous flattery. Plus, it's spring! And who needs lots of ideas? You only asked for 10. So in the spirit of the general gaiety of the season, plus the untold profits I believe far too many agents are leaving on the table by not ardently developing accounts, I cheerfully accede to your request. But three caveats:
First, unlike certain late-night talk show hosts, I need to go beyond a mere clever punch line to do justice to the subject. Therefore, a list of 10 reasons is going to take more room than is allocated for these monthly musings. So just as May introduces the warming weather that leads to summer, this month's article introduces the list that will conclude in next month's issue.
Second, not all the reasons arise purely from coverage concerns. While there are definite coverage advantages that make the list, it would be a grievous error to think there aren't other reasons for pursuing such a combination. Sometimes an agency needs to do the right thing simply because it makes great business sense for both parties to the transaction.
And third, the order in which the items are presented is not meant to imply priority. Of all the reasons available, these are, in purely arbitrary order, the 10 most worthy of making the cut. Let us be off!
Imagine, if you will, Paul Schaeffer and the band playing some catchy Top 10 List intro music. As the music fades, I announce: "I hold in my hand today's Top 10! (Pause for riotous applause and cheers.) Today's topic: The Top 10 Reasons Your Insureds Should Have Their Auto, Home and Umbrella with One Company!" (In reality, there would be stunned silence from the studio audience. But this is my article, so insert more riotous applause here.)
10) Because your agency currently writes only one of those policies!
Alas, statistics from virtually every agency study done by any organization tell a sad tale. Far too many agencies are still writing only one or two policies per personal-lines account. I've heard the dearth of multiple-policy accounts blamed on direct writers, Geico's carpet-bombing approach to advertising, local insurance markets, carrier reluctance, uncompetitive pricing and phases of the moon.
Enough, already. Direct writers and other competitors have seized the top spots on personal-lines production, but none of them controls a majority of the marketplace despite decades of their best efforts. You've heard about Wal-Mart and "big box" retailers dominating other stores. Sure, they sell a ton, but do you shop anywhere other than at those "market killers"? Was there anyone there buying things besides you? If so, a simple question: Why, if the big retailers are so dominant, cheap and unbeatable, do we still see millions of shoppers also buying elsewhere? Evidently someone has figured out how to compete.
I find it interesting to look at insurance department surveys of how much it costs representative insureds to buy a certain product, such as auto insurance. The price range between lowest and highest can be mind-boggling! And so I wonder how those higher-priced carriers get away with it. Why would anyone pay a high price when there are lower ones–often significantly lower ones–available elsewhere? Consumer publications go berserk over this sort of thing. Are folks ignorant? Don't they understand they're being ripped off?
Any or all of the above may be true in some circumstances. But the answer more likely is that those folks are getting something from that carrier or agency worth that extra cost. Convenience, location, a personal relationship and professional advice are possibilities. I certainly pay more to get such things in many of my business transactions, and when it comes to products and services that protect my family and personal belongings, I'm even more prepared to accept an extra cost if it means increased peace of mind. One-stop shopping and a single expert who can handle all their needs are still key attractors for the majority of consumers. If they already have a good reason to deal with you on any of their coverages, start asking for it all. You just might be surprised. And then learn to forgive yourself for all the profits you'd have earned had you only taken that step long ago.
9) Convenience, convenience, convenience!
Why do folks pay $1.50 for a microwavable bowl of soup they could make from a can for 40 cents? Why hurry through the drive-thru when you can eat a far more nutritional meal for far less by cooking at home? Answer: convenience. Marketers have learned busy people will not only pay a lot more for convenience but even will settle for inferior products to avoid perceived hassles and save time.
What are you doing to meet this perceived, even demanded, need from your clients? Sending them three direct bills where one may do? Dealing with three adjusters at claim time when one may do? Making them talk, handle e-mail or receive mail from two or three different agencies or carriers when one may do? It's time to face the truth: Instead of greasing the wheels, you're putting sand in the gears. They not only want a simpler process, but they'll also pay for one that works. Whenever possible, simplify by combining coverages into a single carrier for pure ease of consumer access.
8) Everyone loves a sale!
Despite price fluctuations due to hard or soft markets, insurance regulations tend to forbid or discourage the type of price competition pursued with a passion in other businesses. When was the last time you saw a "The Manager's Away, So We're Going Crazy on Car Insurance!" banner strung across an agency window? When did you last hear on the radio: "The new ISO forms are on the way, so all HO 2000s are priced to move! These babies won't last forever! When they're gone, they're gone!" (Then, spoken as fast as humanly possible: "Subject to rebating, McCarran-Ferguson and non-coercion regulations. Underwriting rules, carrier preference, and approaching hurricanes may alter your eligibility. Your credit scores, CLUE, MVR, protection classes and CSR moods may vary and adversely impact your deal. All sales final, unless and except as provided otherwise by state statutes.")
Anyway, it's retailer gospel that if you want to move merchandise, slap a sales sticker on it. So when an opportunity arises to honestly provide your insureds the opportunity to take a discount right off the top of their premiums, grab that puppy and run with it!
Multi-policy discounts are just such a Sale! sticker. And you have one giant advantage over retailers: No one worries that the sale merchandise may be damaged, flawed or going out of style. You're offering a package of policies with absolutely no loss of coverage for less than the same coverages purchased separately. Even ignoring convenience and the possible simplification of billing and claims, what's not to like?
7) Carrier variances in policy language are moot!
While the vast majority of carriers use standardized auto and homeowners forms from ISO or AAIS, there is a veritable plethora of variations. For example, check your coverage forms and see which carriers have included a footnote similar to the following: "Contains material copyright Insurance Services Office." What this means is the form also contains material not copyrighted by ISO-namely, the carrier's own variations in coverage and policy language. Discovering exactly what those variations may be is a mission for many a coverage analyst and seminar leader.
While some variations may be considered simply a rewording more pleasing to the insurance company and signal no intent to change the coverage, others can represent critical differences or intended enhancements. For coordination of coverage purposes, standardized forms are worded with the assumption that all other insurance policies on the risk are also standardized. Even renumbering a paragraph in a carrier-specific form can lead to problems such as endorsement confusion and conflict in applying other-insurance clauses.
Another coordination-of-coverage problem arises from the fact that there is no widely implemented standard for personal umbrella forms. Many an unfortunate agent has diligently coordinated the auto and homeowners coverages on standardized forms, only to throw the whole liability mix into chaos by layering on additional limits via an "umbrella" that is actually designed to be only a follow-form over a specific carrier's form language. Thus the "umbrella," instead of simply giving more of the same coverage, actually provides narrower coverage than the underlying. Now we end up risking everything from mere coverage confusion to "What do you mean it isn't covered, when I specifically bought this thing to cover that?"
Such potential conflicts, minor or major, can be minimized or eliminated if all coverage forms on a given account are created by the same carrier. There is always the possibility of conflicts even among standard forms, but the potential for gaps and misunderstandings really shoots up when you try to coordinate coverage and claims among policies with totally different provisions and language.
Looking for No. 6? As Howie might say on "Deal or No Deal," we'll give you that answer-right after this monthly break!
Chris Amrhein is an insurance educator and speaker with more than 30 years in the industry. He is also chief fun officer of www.insuranceisfun.com, where his newest book of insurance musings, "Yes, Virginia, There Is Insurance," is now available. Readers may contact Chris at chris@insuranceisfun.com.

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Policy Issues: Why to put all personal-lines policies with one insurer

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