As I was walking to catch a train here in Chicago the other day, I saw numerous billboard advertisements throughout the station for Allstate insurance. Each advertisement posed an insurance question and told the reader to ask an Allstate insurance agent, thus suggesting the agent would know the answer.

I was amused to say the least. In my 30-plus years in representing policyholders in property insurance claims and lawsuits, rarely have I encountered an insurance agent who understands insurance coverage and, more importantly, is willing to advocate a coverage position for his or her policyholder. Unfortunately, most insurance agents are nothing more than what I like to call a “pizza order taker.” You ask for a cheese and sausage pizza, that is all you are going to get; no inquiry is made as to whether you want additional toppings or sides such as a salad.

Below are some of the questions on the Allstate billboards and how I would answer them based on my reading of Allstate Insurance Company’s Deluxe Plus Homeowners Policy (Form AP337). Ask your Allstate agent these same questions (or even an insurance agent for State Farm, Farmers, Country Mutual, American Family, etc.) and compare them to my answers, assuming the agent agrees to answer them.

  • I dropped my camera in Belmont Harbor. Am I covered? No. A camera is personal property, which is covered if it is owned or used by an insured person anywhere in the world. The form covers a sudden and accidental direct physical loss to personal property caused by specific perils. But, none of the 16 named perils in the form involve loss caused by dropping a camera in a lake. Even if there was coverage for this peril, recovery would be limited to $200 if the camera was used or intended for use in a business. An agent who truly understands personal property coverage would advise a policyholder to schedule valuable personal property like a camera, wedding ring, and antiques or collectibles, as scheduled personal property provides broader protection than unscheduled personal property.
  • I left my curling iron on. Am I covered? Assuming the question means am I covered if there is an ensuing fire to my home, the answer is yes, unless Allstate believes leaving the curling iron on was an intentional act designed to cause a loss. That an insured is negligent in leaving a curling iron on does not preclude coverage if an insured dwelling burns down as a result.
  • My toilet overflowed. Am I covered? Yes. The form covers a sudden and accidental direct physical loss to the insured dwelling unless limited or excluded. There is no exclusion for a toilet overflow caused by a clog in the toilet trap or drain pipe, which typically happens when too much toilet paper is used. Additionally, the form covers a sudden and accidental direct physical loss to personal property caused by water that escapes from a plumbing system, which would include water overflowing from a plumbing fixture like a toilet.
  •  Frozen pipes burst while I was away for the weekend. Am I covered? Yes. The form excludes discharge of water from a plumbing system caused by freezing while the insured dwelling is vacant or unoccupied unless reasonable care is used to maintain heat in the dwelling. At first blush, the exclusion would appear to apply, as the dwelling was unoccupied over the weekend. But, courts have concluded that a temporary absence from it with an intent to return does not render a dwelling unoccupied. As far as the exception to the exclusion, what constitutes reasonable care to maintain heat depends on the facts and circumstances, though setting the thermostat at 55 degrees or above is usually enough to satisfy the exception.
  • A raccoon is in my attic? Am I covered? It depends on the nature of the damage. The form excludes loss to an insured dwelling consisting of or caused by “rodents.” A raccoon is neither a rodent nor vermin. Thus, raccoon damage to the dwelling structure is covered. However, none of the 16 named perils in the form involve loss to personal property caused by a raccoon. Thus, if a raccoon gnaws through a wedding dress stored in the attic, there is no coverage for the dress. That Allstate covers raccoon damage to the insured dwelling is evident from its “Mayhem” commercial which can be accessed on YouTube, which shows the character named Mayhem playing a raccoon damaging the roof and attic of a home.
  • Jim Johnson

    You are pretty much correct on the average agent’s knowledge and
    involvement in the specifics of claim coverages. Back when I was a young property adjuster, I was pretty well trained on policy forms and coverages before I was allowed to handle claims. Also, I used to get a lot of calls from agents for coverage questions similar to what you illustrated. In retrospect, it was a good learning experience for me.

    To
    be fair to many of today’s captive insurance agents, if they spend very
    much time trying to sell and service property policies, they might not
    have a job for very long. They have to sell other products such as life
    insurance, IRA’s, and other products to make a living in insurance
    sales.

    Although, what is scary and both sad for policyholders,
    is that a lot of property adjusters being turned out by their respective
    companies to answer claims questions and settle claims, can’t even
    answer their policy holder’s simple coverage questions accurately!

  • shirley heflin

    Dear Mr. Eschoo:

    I really like Allstate’s “Mayhem” character and – in my opinion – he’s the best thing about Allstate and/or it’s insurance agents. He’s handsome and amusing, however, ensuring that an Insured is adequately insured is not an “amusing business.”

    Allstate Insurance Agents work on a commission basis so they’re more concerned about making a “sale” than ensuring that an Insured is adequately covered (most of them anyway – I suppose there’s an exception to every assumption).

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL

  • David Thompson, CPCU, AAI, API

    You said, in part: “…rarely have I encountered an insurance agent who understands insurance coverage and, more importantly, is willing to advocate a coverage position for his or her policyholder.”

    Why don’t you spend a few weeks on the road with me and also reading my emails? Our association represents over 2,000 independent insurance agencies in Florida. Sure, not every agent is “the best of the best” but I could refer you to hundreds of agents who are fantastic. They know coverages, they don’t just quote “apples to apples” but instead invariably quote and recommend the best coverage.

    In my 22 years as an educator, I’ve been involved in hundreds (if not thousands) of situations where an insurer denied coverage. Most times denials are correct, but when they are not in our view, we provide information to the agent to send to the insurer and the claim gets paid. This got the coverage the money owed, without having to hire an attorney.

    Your statement about agents would be similar to my saying, “Rarely have I met a good attorney.”

    David Thompson, CPCU
    Florida Association of Insurance Agents

    • Gary Williams

      I think your average independent agent is a far different animal from an Allstate “agent.” Allstate and Farmers agents are a liability to the insured. There are still a few State farm agents who know enough and are willing to help an insured. Independent agents are often knowledgeable and willing to speak against the carrier for their insured’s benefit.

  • “In my 30-plus years in representing policyholders in property insurance claims and lawsuits, rarely have I encountered an insurance agent who understands insurance coverage and, more importantly, is willing to advocate a coverage position for his or her policyholder.”

    If your primary contact with insurance agents is at the time of a lawsuit, then it’s understandable that you might often be dealing with a coverage-incompetent agent. That’s quite possibly the reason for the lawsuit. As a result, you may rarely encounter technically competent agents because they are less likely to be involved in a lawsuit. In other words, your experience cannot be generalized to the entire agency population.

    That being said, there are undeniably far too many agents who lack the requisite knowledge of coverages, statutes, exposure analysis, etc. to properly serve the public. There are reasons for that we don’t have the space to explore here.

    As for claim advocacy, my experience working with independent insurance agents across the past four decades is exactly the opposite of yours. Even coverage-challenged independent agents will often seek expert advice to advocate on behalf of a customer when a claim is denied. I’ve assisted agents in doing this probably in the neighborhood of a 100,000 times. One reason for this level of advocacy is that, legally, the agent and not the carrier (as is the case with captive agency insurers), actually “owns” the customer. That being said, how the agent does this does have an E&O component that must be considered.

    To quote Alexander Dumas, “All generalizations are dangerous, even this one.”

  • Anthony

    I met with an All State Agency owner who gave me his personal declarations page and asked me to ‘give it to him straight’. Well, he had a scheduled roof endorsement. When I asked why, he stated that his roof was more than 15 yrs old and no ins co pays for a new old roof.

    I chuckled and told him that I see hundreds of policies each year and this is only standard practice from All State. I was amazed at the lack of policy knowledge by the ‘Boss’.

    If an agent truly wants to help their insureds get paid ALL potential claims should be directed to a Public Adjuster- the person the State licenses just for claims. Get a PA involved first. Not for when claims go awry.

  • shirley heflin

    Dear Mr. Eshoo:

    P.S. I just found out today that Allstate’s “Mayhem” guy was on Law & Order for several years.

    Just an FYI.

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL