Direct Interception of a Bad Sale?

[NCAgent]

So I was staying over at a friend's house who is looking to move out from the family. His mom was trying to get him insurance and there was an agent over from a captive company. The agent was looking to save them a bunch of money by bundling all of the products together.

Now, I've been exclusive for Allstate for a while so I know that we aren't always the cheapest. My friend was with Allstate as well and the agent quoted the mother a 2,000 a year savings for 3 vehicles, a HO, and a renters policy for the son.

Now, I was surprised but it was believable. However, I walk over to watch the transaction just because I was interested in how this was working. I looked at some of the paperwork the agent was going to have the mother sign.

HO: 2,000 deductible with high wind damage percentage. ACV with 30k contents only. Stripped of certain endorsements like water damages and mold
Renters: 5k contents with ACV, 100k liability and 1k medpay only
Autos: 30/60/25 policies with 2k Comp and collision

Basically the agent sold them one of the worst policies available for home and auto. Hell, a 2k deductible wasn't even going to be acceptable by the leinholder. They also had a german shepard and he put no dogs on the policy.

I'm starting to wonder what I am getting myself into. I know this is a noble profession but we're sabotaging ourselves more than anyone else can to us. It sickened me.

I've seen similar things at the Allstate call center. Sometimes people get ACV (you have to go out of your way to electronically choose ACV) with minimum liability and contents coverage. They don't ask about jewelry, or anything. I never suggest people get minimum liability either, it's not worth it.

Anyone else have stories of stopping a trainwreck of a policy or keeping a person from being in major harm's way if a peril were to occur?

 

[Bertolinoins]

I run into a lot of poorly written policies, usually from direct writers doing whatever they can to be competitive. I refuse to cut corners because they will eventually come back to bite you. I have a non standard auto agency in my office building and I send the cheapskates over there. Those types of clients are not profitable and they are usually high maintenance.

 

[Guest]

When your agency is going backwards...you do whatever you have to to still put food on the table.

Its a fine line to cross......

 

[VolAgent]

When your agency is going backwards...you do whatever you have to to still put food on the table.

Its a fine line to cross......

If you have to hurt people to pay the bills, its time to find a new career.

 

[Guest]

If you have to hurt people to pay the bills, its time to find a new career.

AGREED! But it still happens. The sad part is in the above example, instead of saving the people $2,000, the agent could have added some of the "needed" coverage, gave the people what they needed and maybe only saved them $400 a year and made them much more happier.....

 

[djs]

Or at least offer 3 proposals and let them decide what they want.

This year is better, but last year I had a lot of policies lapsing for non-payment. I had to work with them to find some middle ground, make the payment much more affordable, even if it meant lowering coverages for a while. Better to have some coverage than no coverage.

But at that point, it was a conscious decision to lower coverages.

Ironically, what I tried to avoid was raising deductibles. While sometimes this is the most obvious way to 'save' money, frequently even writing the $500 check for the auto deductible would have been disasterous, writing a $1000 check would never happen. This meant liability coverages coming down, medpay being reduced or eliminated, rental car coverages going away, whatever it would take to make it work. I made them feel the pain though.

Then you followup every 3 months, to see if it can be put back.

Doesn't sound like this was the case here. Someone was just after numbers.

Dan

 

[NCAgent]

Or at least offer 3 proposals and let them decide what they want.

This year is better, but last year I had a lot of policies lapsing for non-payment. I had to work with them to find some middle ground, make the payment much more affordable, even if it meant lowering coverages for a while. Better to have some coverage than no coverage.

But at that point, it was a conscious decision to lower coverages.

Ironically, what I tried to avoid was raising deductibles. While sometimes this is the most obvious way to 'save' money, frequently even writing the $500 check for the auto deductible would have been disasterous, writing a $1000 check would never happen. This meant liability coverages coming down, medpay being reduced or eliminated, rental car coverages going away, whatever it would take to make it work. I made them feel the pain though.

Then you followup every 3 months, to see if it can be put back.

Doesn't sound like this was the case here. Someone was just after numbers.

Dan

That is exactly what it sounds like, someone after numbers. I don't really increase the deductibles because in my experience it rarely lowers the premium by a substantial amount. If I go from a 500 to 1k deductible and it lowers the premium by 60 dollars, then I would tell the people that they are going to be paying 440 more dollars than the way the premium is now.

It does sadden me though that some people abuse the trust in the position they are in. I'm not going to lie, I'm horrid with life and health right now because I have no license or real exposure to it. If my agent was telling me how to handle my policies, who else would I trust besides my local insurance expert?

 

[BTFuzz]

That is exactly what it sounds like, someone after numbers. I don't really increase the deductibles because in my experience it rarely lowers the premium by a substantial amount. If I go from a 500 to 1k deductible and it lowers the premium by 60 dollars, then I would tell the people that they are going to be paying 440 more dollars than the way the premium is now.

It does sadden me though that some people abuse the trust in the position they are in. I'm not going to lie, I'm horrid with life and health right now because I have no license or real exposure to it. If my agent was telling me how to handle my policies, who else would I trust besides my local insurance expert?

On the flip side...if they raise their ded to $1k and save $60 over say a period of 10 years, they'll save $100 during that time ($600 if no claim happens) Bottom line, be honest and give them thoroughly explained options so they understand what they are getting.

 

[NCAgent]

On the flip side...if they raise their ded to $1k and save $60 over say a period of 10 years, they'll save $100 during that time ($600 if no claim happens) Bottom line, be honest and give them thoroughly explained options so they understand what they are getting.

I concur. However, I somewhat disagree with the logic of saving that 60 dollars over 10 years. It would take 3.5 to 4 years to break even for saving that extra 500 in deductibles. After 4 years of saving 60 dollars at 2 policy periods each year (remember auto renews every 6 months in almost all states), that is 480 saved.

That sounds great over 10 years but now imagine someone getting into a wreck during those first 4 years. They are not going to be saving the money quoted, and even worse now they have an extra 500 to pay. Some people pay a little more now to avoid paying a LOT more later. Heck, isn't that the point of insurance?

Obviously it's a case-by-case basis and facts can change per policy, but for a lot of people, if not most, the better choice is to spend an extra few bucks a month to have a 500 deductible rather than 1000. Or a 250 deductible rather than 1000.

 

[Guest]

so OP. the question is...........what did you do about this?