How Do You Turn Down Business?

[VolAgent]

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.

By zip code would pretty much be the definition of redlining, denying access to insurance based on the neighborhood in which you live.

 

[Tahoe Ray]

By zip code would pretty much be the definition of redlining, denying access to insurance based on the neighborhood in which you live.

I know very little about P&C but don't companies routinely deny coverage on this basis?

E.g. I have an oceanfront property so I can't get flood.

I guess it is probably different if an insurance agent won't quote it vs a carrier not offering it but they seem very similar to me (a P&C lay person).

Why is this?

 

[Guest]

I know very little about P&C but don't companies routinely deny coverage on this basis?

E.g. I have an oceanfront property so I can't get flood.

I guess it is probably different if an insurance agent won't quote it vs a carrier not offering it but they seem very similar to me (a P&C lay person).

Why is this?

The vast majority of major carriers do not offer flood coverage, you have to buy it from a specialized carrier or from the federal government under the National Flood Program.

So they aren't offering it to you because they don't offer it to anyone. Its the same as if a company, like Geico, only insures vehicles and not homes. They won't insure your home because they don't offer homeowners insurance.

 

[Tahoe Ray]

The vast majority of major carriers do not offer flood coverage, you have to buy it from a specialized carrier or from the federal government under the National Flood Program.

So they aren't offering it to you because they don't offer it to anyone. Its the same as if a company, like Geico, only insures vehicles and not homes. They won't insure your home because they don't offer homeowners insurance.

OK. So carriers can't/don't restrict perils based on geography? Meaning if I live in tornado zone or my area is prone to earthquakes, carriers will either offer this coverage or they won't? If they offer it in lower risk areas and restrict it in higher risk areas, wouldn't that be the same as redlining?

 

[Bertolinoins]

Offer a quote with your carriers that don't offer profit sharing and give them the option to pay in full or via eft. Get everything signed and take pictures of their vehicle. I try not to prejudge people, there is a chance that non standard client can turn into a good client in the future. I cannot tell you how many guys I know that were idiots in their 20's that have turned into great clients in their 30's and 40's.

 

[VolAgent]

I know very little about P&C but don't companies routinely deny coverage on this basis?

E.g. I have an oceanfront property so I can't get flood.

I guess it is probably different if an insurance agent won't quote it vs a carrier not offering it but they seem very similar to me (a P&C lay person).

Why is this?

You are right. A carrier refusing business on the coast of the state but accepting business away from the coast would seem to be redlining as well. I can only guess it is because they have worked with department of insurance regarding this.

 

[Guest]

OK. So carriers can't/don't restrict perils based on geography? Meaning if I live in tornado zone or my area is prone to earthquakes, carriers will either offer this coverage or they won't? If they offer it in lower risk areas and restrict it in higher risk areas, wouldn't that be the same as redlining?

You're not getting it, bro.

If a carrier offers tornado or earthquake coverage in a state, they have to make that available to everyone in that state. They can't say 'Well we will write houses in Mayberry, but we aren't writing any business in the next town over in Hooverville.'

So to answer your question... No, carriers do not restrict perils based on geography. They either offer that coverage to everyone or they offer it to no one.

An example of this would be in Mississippi, Louisiana, and Alabama. A few companies have only offices in the northern part of the state and have none toward the Gulf. They do not want to write business near the gulf so they just don't have any agents, marketing, etc in that area. However, if someone calls in who has a beach front home and they want to insure it, that company has to offer them insurance based on the same criteria they use for everyone else.

 

[NCAgent]

Depends on the state.

In NC once you go East of I-95 it becomes nearly impossible to get wind and hail coverage. most companies won't write there period, and for the ones that do they exclude the wind/hail peril and you have to buy that coverage elsewhere. So don't make a general standpoint on those things, it depends on the state.

I think an insurance carrier is able to eliminate coverage depending on the area or tell people where they can and can't write.

 

[djs]

I don't think weather is a protected class, so you can discriminate against actuarially sound weather issues.

You can't discriminate against people though.

Its also not a P&C issue, it is true in life and health as well.

If you make house calls selling life and someone calls you from Harlem and wants you to come over to sell a life policy, if you work that area, you pretty much have to go. You can set the hour though, but its not cool to turn down the appointment if you would accept it except for where it is.

Yes, carriers can either rate or deny certain business classes by filing with the DOI. Don't want coastal risks? Tell the DOI why and they will allow it. On the other hand, you can't take coastal risks in one zip code and not in another, unless there is an accepted actuarially sound reason.

Dan

 

[Norwayguy]

I don't think weather is a protected class, so you can discriminate against actuarially sound weather issues.

You can't discriminate against people though.

Its also not a P&C issue, it is true in life and health as well.

If you make house calls selling life and someone calls you from Harlem and wants you to come over to sell a life policy, if you work that area, you pretty much have to go. You can set the hour though, but its not cool to turn down the appointment if you would accept it except for where it is.

Yes, carriers can either rate or deny certain business classes by filing with the DOI. Don't want coastal risks? Tell the DOI why and they will allow it. On the other hand, you can't take coastal risks in one zip code and not in another, unless there is an accepted actuarially sound reason.

Dan

I'll give an actuarially sound reason to turn down an appointment in the hood....My wife is against me being mugged, no one can make me do an appointment...