I’m sitting in a phenomenal class this week hosted by Germania Insurance. Germania pays to bring in their agents from the field and, over the course of several days, review, line-by-line, their insurance policies. Most retail consumers (especially with personal lines of insurance) have the mistaken belief that policies are commoditized - that each carrier’s policy is the same as any other and are just shopping on price. It is unfortunate that some brokers I’ve come across think the same thing. It’s just not true – especially in dwelling/homeowner/property policies. I’m even more surprised at the number of folks who haven’t actually read their policy or discussed in detail their purchased coverage with their broker (perhaps I shouldn’t be),
Insurance policies are specialized legal contracts. They can be long and wordy and many agents and consumers rely on graphic summaries of policies that gloss over many of the finer details. The old-school value of sitting through a detailed reading and understanding of the insurance products being sold is much less frequent. The question I pose is if a broker doesn’t have a clear understanding of every piece of an insurance policy, how can they properly advise a retail client?
Interestingly, when I was chatting with Mark Boeker (the class trainer)
, it turns out that Germania is considering cutting the class time by 60%. Perhaps their expectation, like other carriers, is that practitioners will gain the same information via self-study. Idealistically, I buy that. Most professionals (lawyers, doctors, etc.) do that and is why they are termed ‘practitioners’. In reality, I’m less convinced. A lot of business is transacted on speed and relationships (not necessarily a bad thing, mind you), but there has to be the underlying knowledge as well.
Consumers: If you do nothing else with your insurance, take 2 hours out some night and pull out your homeowner’s (or renter’s) policy and read it. Seriously and intently read it. Call your insurance advisor (broker, agent, whomever) and ask them a few questions…ask them to go through it with you and make sure you know what coverage you are paying for.
Car Insurance Discounts – Couples, Marriage, and Same Sex Couples?
The goal of any insurance carrier is to find traits (at least legal ones) of individuals that indicate how risky, in general, they are. A good example is that someone with “good credit” tends to be, on average, a better driver who is less prone to accidents. A characteristic many auto insurers use is whether someone is married or single. The theory goes (and the math tends to support it) is that, on average, a person that has reached the maturity to enter into a marriage and family is more stable, more risk averse, and therefore a better driver. Most insurance applications ask whether the candidate is married.
I have long been advised, and equally believe, that you can never win by mixing either politics or religion in a business setting. There are just too many view points and too much emotion surrounding the topics. Without taking a viewpoint, however, on whether someone should support same-sex marriage, I’ve had an interesting client enter our office this week. She is in a long term relationship with another female. Here, in Texas, same sex marriage is neither legal nor recognized from other jurisdictions. On the other hand, strictly from a risk characteristic, does the “entering into a committed relationship” with another person equal the same sability, maturity, and risk averseness of a conventional married couple?
As State laws continue to diverge from each other, National carriers have to be grappling with this same question. From a strictly business stand point, does the entry of a gay couple into a relationship, convert to providing car insurance discounts. While I’d argue it does, I have yet to see any of our major carriers switch their risk profiling to capture this demographic.
We’ll push by phone and directly with underwriters to make the case for our particular client….but I do feel like it is only time before uniformly carriers begin providing insurance discounts to unmarried couples in States that don’t recognize such unions.