Reader Letters

Communication situation

I always read Barry Zalma's “Down to Cases” columns as they usually are both concise and interesting. In his May article, “Cancellation to Litigation,” he wrote “the agent must have a system in place to personally contact an insured who fails to pay premium.” In teaching E&O courses, we always advised agents not to have such a process because:

1. If you have a pattern of calling and you miss once, your goose is cooked if the policy lapses and a claim occurs
2. It's a poor use of finite resources in an agency to constantly “babysit” insureds when they already have received written notice from the carrier
3. It's dangerous to have categories where large clients are contacted but smaller ones aren't.

Do you have a response?
Philip Lieberman, CPCU, CLU
Caldwell, N.J.

Zalma response: Yes, that particular case involved a situation where the insured had changed his location and the notice of cancellation did not reach the insured because it went to the old address.

I think it is best, when a notice of cancellation for non-payment is received, for an agent or broker to determine from its insured whether he has replaced the coverage and should cancel at his choice rather than have the stigma of a cancellation for non-payment; or if he intended to pay and just forgot or did not get the renewal billing.

Insurance is a service business; you cannot ignore the obligations to provide service. The agent who did not call was sued for E&O because it failed to provide the service promised. I don't want categories other than that an agent should always contact an insured where the policy is canceled for non-payment.

Agents should not “babysit” insureds as you put it, but they should not lose clients, and commissions, because they failed to make phone calls.

Calming advice

Thank you for the editorial “Just Breathe” in the August 2011 issue of American Agent & Broker.

With everything you mention in terms of bad economic news, personal demons and checking up on work at the office on your laptop while on the mini vacations (the only ones we can afford these days), fearing that you may not have a job when you get back, is no way to live.

You're right—life is too short. After your editorial I just took a good deep breath! I forgot to breathe for the last 2 years. I needed to hear that message this Saturday morning from you. I hope that some of the other readers and subscribers of AA&B start taking the time out to “just breathe.”
Robin Woodley,
AIS Loganville, Ga.

Thanks so much for reminding us all to take the time to just breathe in response to Maureen Wall Bentley's passing. While so difficult to find the opportunity in this particular challenge, your words captured the essence of life, simplicity and grateful appreciation.
Lloyd D. Yavener
Harrisonburg, Va.