Dynamic underwriting exists…and somehow it is bad for customers

I’ve had my own run of claims as well as some others going on lately.  Fortunately, an occurrence that could have been claimed, sort of,  and a basic “How to handle a claim post”

Both are still accurate and both are somewhere between far from the truth and not enough.  I’ve long thought insurance functions as much like a credit card or bank loan than what people expect from insurance.  But, maybe I’m also abusing or misusing the word dynamic a bit.

Review and repeat, It’s a cycle disguised as a tag line

Today’s idea comes from a silly, boring post in 2011  Although it was a short, almost lay, post, the message is correct and overlooked.  I’m guilty as charged.

But how do you find ” an average savings of $432….”  when reviewing auto insurance.  Well, the game is more or less rigged.  Some of it can mimic “self-sabotage” but it is really corporate laziness/indifference?  Here are some facts/scenarios to consider;

  • Insurance rates change. Period.  Sometimes a company can do it once a year…if the regulators cooperate.  Certainly every 18 months.

The most powerful paragraph in insurance

AKA  My and the Insurance/Banking industry’s simultaneous biggest problem and opportunity

AKA What #insurtech should be trying to solve but outside of me and maybe some people I have not found yet, is not.

Really it is two paragraphs.  One that comes from a standard document that you’ll find in your policy forms. Yes, I know you likely do not read them.  Also, the version in your state may be different.  The other is a direct quote via an email.  I see or hear variations of the second one every week.  So here goes;

When the system breaks

I lose some sleep and wake up thinking about yesterday’s “loss.”  Not really a loss more like a time where everything seems to match up but it just doesn’t.  Everything is there;

  • was referred by a trusted person(is there any better way)
  • has been with me a few years(yup, 98+% stay)
  • had actually met in person(shocking but happens)
  • helped with a non-insurance thing(helped get one a job)

So you go into the renewal time ready to follow the plan and this time it doesn’t work.  Factually the overall plan always works.  But, within that plan, sometimes the sub-plan doesn’t get the expected result.  Take the other set of circumstances;

Rethinking claims and the causes

***Working thought, from an idea via a longtime friend***

So the scenario is quite common, friend calls and says they want to have some tree work done on their property.  Pretty common.  You can also insert, new roof, new furnace, upgrade to electric panel, drainage dug, fire alarm installed, etc.  Think of it as any proactive, likely preventive measure that can reduce the likelihood and at worse the severity of a claim.

“Bill, is there an extra discount for cutting down the trees?  Will they(the insurance company) pay for it?  ”    No and No.

When your “competition” helps you

So I was playing around with on-line quoting and of course had to use Geico.  Recently, now about 3 months late I received a well done email.  Obviously now part of a drip campaign.  This is not remarkable but what was there certainly is.

Coverage Coach

FANTASTIC.  First of all it is a very cool tool.  Clean screens, easy to use, etc.  But why is this important?

BECAUSE THE COVERAGE THEY OFFER IS NOT AS GOOD AS WHAT YOU DO!

Let’s go shopping

So it is time to take my own advice again.  With renewals for auto and home insurance pending I decided to do some shopping.  I’ve definitely written about what to do when your rate goes up but this time I did things  a little different.

START; Unfortunately my home is basically unmovable, two claims in less than five years.  So I look at what the rate will be without a multi-policy discount.  But wait, it gets a little worse.  I had a stretch in 2012 and early 2013 with three tickets.  Not good.  But, on a plus side, my wife’s two claims are now over five years old so they fall off.

What price do you really pay for your auto and home insurance?

With several hundred companies offering auto and home insurance in the U.S. you would think a bit more variety would exist.  The reality is that the majority of them are after the same demographic; good to great credit, home ownership, college educated, multiple cars. Then there is everybody else.  With a constant turn over of actuaries and heads of underwriting everybody else inevitably can get luck and fit into a preferred companies model.  Generally due to a fluke in the sophistication of underwriting.  But the reality is still that there are only three prices available to the public and YOU choose your price.

Delusions in insurance

1. We want to be the largest in america…. WHO CARES my guess is your policyholders don’t.

2. We can save you $480 or 15% or an average of … WHO CARES reality is saving that amount of money just means something was wrong.

3. Rates go up due to inflation…MOSTLY CRAP rates go up to keep the bottom line healthy. If people knew how much money was floating around in insurance they would go bonkers

4. Discount double check, in good hands, join the nation, like a good neighbor…SLOGANS are for the company not for you.  Sooner the companies put more resources into helping their policyholders and less into marketing the sooner you will see insurance improve.

What kind of radio are you?

Are you terrestrial radio?  So for 9 years it was me and my xm radio.  Now about a year and a half ago I started having an affair with Pandora and it was and continues to be wonderful.  So what is a guy to do?  Well as fate would have it my receiver stopped working in the car.    So now it is me and a binder full of Success magazine cd’s and pandora through my phone.