Ah, the merry month of May! Throw open those windows, clean out those closets, breathe in those new flowers, and invade some privacy!
What? How dare I jest about invasion of privacy in these times of identity theft and data hacking? How soon we forget that invading another's privacy is an honored tradition in this and every other culture. How else do you explain the popularity of talk shows, the much-copied "People's Court," "reality" television and celebrity magazines? Some cable channels–such as Court TV and E!–are devoted entirely to invading privacy.
Despite all of the hand-wringing over how to protect our privacy, I suggest insurance folks have got to start a massive effort to do just the opposite. In other words, it's time we insurance denizens quit lollygagging and aggressively upped the invasion quotient!
Why, you may ask? To learn enough to do our jobs properly! From news wires, industry magazines, press releases, e-mails to the Virtual University and questions I get in the classroom, the message is clear: Agents know almost nothing about their insureds. Yet in both ethical and E&O scenarios we are required to be up-to-speed on the finest details to render proper coverage and risk management products and services. As evidence, I cite a few examples.
oProper insured values. Following nearly every major disaster–be it flood, hurricane, tornado or earthquake–tales arise of underinsurance woes. Injured parties find out that the coverage they were so sure was adequate is going to fall short–and we're talking about major shortfalls, typically in the 35% to 50% range. Of course, building materials and labor costs go up after a disaster. But since we all know that, why isn't anything done before a loss to take those costs into account? To be caught unaware is one thing; to know a problem is imminent and fail to properly prepare or warn our insureds is quite another.
oKnowing the exposures. In every class I teach, students tell me of insureds who closed in a screen porch and never called; who bought a new Jet Ski and never called; who remodeled the garage and bathrooms, yet never called. Notice a pattern here? Perhaps if clients never call us–but we are going to catch grief if the coverage is wrong–we should risk intruding on their privacy and call them. You think? Yet I have visited many agencies whose client files don't have a single notation of an agency-instigated call. Any calls that are listed almost always are instigated by a client or are agency call-backs following client requests. How are we supposed to know our clients' coverage needs if we never ask?
oRemedying coverage limitations. All insurance policies have limitations and exclusions. If an insured is adversely affected by one, we can offer endorsements and specialized policy forms–assuming, of course, that we have invaded their privacy enough to learn of such needs. For example (and as discussed in a previous article), several surveys indicate that somewhere between 40% and 70% (depending on the survey) of Americans are currently involved in some form of home-based business. How many of those folks are your clients, and how many of the necessary endorsements and/or forms have you written to provide the coverages they need?
And don't stop invading their privacy there–we have much more to uncover! Do clients need any auto policy endorsements for customized equipment in their cars or for CDs or DVDs? How much electronic equipment–such as computers, home theaters and security systems–have they added to their homes? Have you upgraded them to an HO-5 or added endorsements such as the "special computer coverage" endorsement to overcome the "electronic components or circuitry" exclusion in other HO forms?
Just where is that graduate school-enrolled son or daughter living these days–and how old are they again? Do you have the proper address listed on the "Additional Insured-Student Living Away From the Residence Premises" endorsement? (You have added that endorsement, haven't you?) And everyone at the country club has been admiring your insured's new golf cart. It's a real beauty–which you realized when you went to get the serial number required to schedule that baby on the HO 05 28, right? And need we even discuss scheduling those jewelry items, art, baseball cards, comic books, beer cans, dolls, firearms or other collectibles, all someday destined for eBay?
Bottom line: A cornucopia of coverage needs lies in wait for the astute agent willing to take a bold step through that curtain we label "privacy" in an ongoing quest for doing this job right. If they throw you out, no big loss. Just get their initials on that "Thanks, but no thanks" form to keep your E&O carrier happy, and move on to the next opportunity. And, as revealed daily by loss situations in which the coverage is found to be lacking in one form or another, the opportunities are numerous and enormous.
Perhaps one day Wal-Mart will have its way, and every item purchased anywhere will have a tiny RFID chip built in. Our world will be totally wired together, so that every electronic transaction anywhere will instantly be available everywhere. (We are almost there today, with GPS tracking and ubiquitous cell phones and your public files and address (along with a satellite picture of your location) readily available via Google and other search engines.)
On that day, when a client purchases that new golf cart, our agency system will automatically be notified, the carrier will be contacted, the proper endorsement added, and the necessary premium automatically billed to the client's bank account. If the client buys a new room of furniture, adds a home theater or purchases a major sound system upgrade for the car, the information will immediately trigger a re-evaluation of the current HO Coverage C or auto Part D values, and any needed adjustments made automatically.
Significant changes in payroll or job status will trigger instant reviews of life and disability coverages. A finalized divorce decree will automatically create the needed separate auto, home, health or other policies, with the needed values and information transferred into the new files. A birth announcement will create life and health coverage reviews, along with a follow-up for future significant dates (such as the 16th birthday). A death notice will instantly trigger the necessary changes in coverages, process payment of life insurance proceeds, and, if the deceased is of retirement age, notify Medicare to begin totally screwing up the files when processing final medical expenses.
In short, some day we will all live in a world where invading privacy will be total, constant and, indeed, expected. And on that day, we will finally get the coverage right.
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. Readers may contact Chris at chris@insuranceisfun.com.
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