Insurance customers buy insurance from agents to obtain the best coverage at the best price. A recent article in the July 2023 Rough Notes, The Fine Art of Contract Analysis, shockingly noted the current plague of policies being written incorrectly.     

The authors, Cheryl Koch and Mary Belka, wrote:     

Undoubtedly, one of the most important value-added services independent agents provide to their clientele is their ability to analyze the various policies available in the marketplace in order to make recommendations that are tailored to the needs of the insurance buyer. This means not only fully understanding the differences between the insurance proposals we receive from our carrier partners, but also those offered by our competitors. A tall order, perhaps, but one of the hallmarks of true insurance professionals.

…How is it possible to make any reasonable recommendation to anyone if we don’t know what each of the insurance contracts we sell and compete against does and does not do?

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The bottom line for agents and brokers is that every insurance contract needs to be reviewed in its totality each and every year. Surely, there are some parts that are more important than others? No! Every word in every contract matters, so it’s critical that the agency review each policy to determine if it’s in keeping with the insured’s expectations.

Sadly, the error ratio when issuing policies is very high-perhaps more than 50%. The last line of defense in making sure a policy is issued properly is the agency that ordered it.

In the complex landscape of insurance, if even seasoned insurance agents can miss key details in a policy, how can we expect everyday policyholders to catch those errors? It underscores the critical need for policyholders to engage with exceptional insurance agents who invest time in understanding and advising on appropriate coverages. Insurance agents undergo rigorous training to identify various risks—risks that many policyholders might not even be aware of, let alone consider. Developing a close, long-term relationship with an agent who can guide you through the maze of coverage options is not just beneficial; it’s essential. As life evolves and assets grow, the stakes get higher. You’ll likely find yourself with more to protect, elevating the importance of having an expert in your corner, especially when faced with unforeseen events that can so often result in financial disaster.

Thought For The Day

A policy is made because an accident is going to happen, whether you plan for it or not. So plan for it. Cover your bases. Protect your assets. Get insurance.

—Chris Boggs