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.