How Do You Turn Down Business?

[Guest]

My favorite response:

"Our E&O insurance does not allow us to write limits that low"

There is an indy agent down the road from me and he tells people that he does not write any policy with limits less than 100/300/100, and sends them on their way.

I'd never heard of that before, so I figured it was just his way of telling them he didn't want them.

He does write policies less than that though, every now and then I take one of his clients and they'll have lower limits.

 

[djs]

Can't you just tell them the rate is too high with the companies you represent and that you know a better fit for them else where?

Be careful. You can't refuse to quote. You just have to make sure you rate appropriately though

Now, you can say, "Hey, I can go ahead and run a quote for you, but based on what you've told me, Joe's Pizza and Insurance next door is a much better fit for you and they have plans tailored for people in your situation. "

The other way around this is simply tell them you need to inspect the car and take pictures of it first (even if only liability), to validate the condition prior to placing coverage. You will be amazed at how many people will say great, be right back, and then never come back.

This also avoids the problem of people getting coverage 'after the fact'.

Dan

 

[FL P&C Broker]

Dan,

Are you saying that you can't legally refuse to quote somebody?

 

[djs]

In CA, no you can't. You can refuse to quote a line of business, but not an individual if you write the business.

Its redlining, which isn't legal, probably in most areas, though I can't speak for anywhere outside of CA.

Without spending to much time on it, a quick resource is:
Redlining - Wikipedia, the free encyclopedia

This is primarily related to housing, but, insurance companies run into the same issues. Don't set yourself up for someone to claim discrimination.


Dan

 

[FL P&C Broker]

Good info. No idea what the law is here. Our unofficial agency stance has been that we do not quote anything less than 50/100 for auto.

 

[VolAgent]

Good info. No idea what the law is here. Our unofficial agency stance has been that we do not quote anything less than 50/100 for auto.

Just be consistent about it. If you will do it for one person and not another, you could be sued for discrimination.

 

[Guest]

So what about those 'We reserve the right to refuse service to anyone' signs that are at almost every convenience store and hole-in-the-wall diner.

If they can refuse service to anyone for any reason, why would an insurance get sued for it?

 

[djs]

Those signs are basically gone around me. I do thing there is a difference when it comes to a store or diner than an insurance company or mortgage broker. Not sure, but I can see a difference.

You can have agency minimum limits, that shouldn't be an issue, if they are reasonable. On the other hand, you can't say 'Oh, you live in zip code 94XXX, I won't quote you'. You can't not quote them because they are dressed funny, skin color, or have an bumper sticker on their car. Nose rings? Quote them anyway.

There isn't a problem with saying the guy down the street has a better deal for them, but you better take the time to find out why you are saying that before you say it.

In general, be consistent and you won't have a problem.

Dan

 

[VolAgent]

So what about those 'We reserve the right to refuse service to anyone' signs that are at almost every convenience store and hole-in-the-wall diner.

If they can refuse service to anyone for any reason, why would an insurance get sued for it?

Insurance is a more regulated field.

But yes, the person comes into your office and is rude to your staff, can't make payments on time, and is generally a bad client you can tell them to hit the road. If they just walked in and you tell them to walk back out it is probably going to look like discrimination.

 

[FL P&C Broker]

If we were talking home owners you could get away with zip code. I know agencies down here that refuse to write in certain zip codes because we have such a big sinkhole problem and it can potentially kill your loss ratios.