I’m still putting in 10 hour days on the book, so this week I’m featuring a guest editorial from Louis Fey, CPCU, CIC, CRM, AIC, an insurance agent, consultant and expert witness from Louisiana.
While there has been a lot written over the years regarding the “brain drain” in the insurance industry, I think the industry as a whole has done a fairly good job of educating the next generation (no, this is not an article about millennials).
The problem our industry now faces is even more insidious, as it is very apparent to me that we are now losing sight of the long standing business relationships as they existed years ago, and most importantly, the industry standards that all insurance professionals are required to apply in everyday insurance practice. This is true for all insurance professionals including agents, brokers, adjusters, underwriters, middle management, and senior executives.
Where it used to be that insurance companies always stood behind their agents (remember the phrase “agency accommodation”), I have been dismayed over the last number of years by a growing trend of an “us versus them” mentality with regard to the agent – insurer relationship. I have seen many examples of overzealous adjusters denying claims based upon a perceived late report (without prejudice) and attempting to blame the agent for not promptly reporting the claim, while the agent was merely trying to balance the interests of the client and the insurer. I have also seen a number of examples where mere clerical errors resulted in coverage denials, where once again, rather than doing the right thing by accepting the claim and acknowledging that it was just a mistake, the insurer took a scorched earth approach hanging the agent out to dry. That never used to happen.
I worry that civility in our industry is disappearing. It may be that a younger, less experienced, yet more aggressive work force is the cause of this trend, however I hope that this trend will reverse course and return to the days when we were “all in this together”, and where the overriding consideration was the welfare of the insured/client. These are industry standards that all of you reading this have heard many times, include things such as:
- Coverage should be evaluated with an eye towards providing coverage, not in an effort to exclude coverage
- The insurer must prove that an exclusion applies to exclude coverage for a claim
- The insured should be given the benefit of the doubt when there is an ambiguity in the policy
- Any undefined term in an insurance policy should be given broad meaning (as long as it does not lead to an absurd result) in an effort to provide coverage, not a narrow interpretation to preclude coverage (“read in, read out”)
- All coverage available to an insured must be disclosed and the claim process clearly explained
All too often I am confronted with overzealous adjusters attempting to manufacture claim denials. While I will ask that they point to the particular policy provision they feel excludes coverage, I am many times met with the following mantra; “We have sought a coverage opinion and our attorneys feel the claim is not covered.” When asked to reconsider, the silence is deafening, and when there is a response, all too often the response reflects that no real consideration was given to the request.
We need to keep in mind that attorneys are trained to be “zealous advocates for clients” (here, the insurance company), and they therefore take an entirely different approach to coverage interpretation than that required of an insurance adjuster, which is to try to find a way to cover the claim. Therefore adjusters need to have that discussion with coverage counsel so that they understand that the adjuster is actually looking to provide coverage, not looking to deny the claim. How many times do you think an adjuster has had that conversation with coverage counsel?
Even when asking simple questions regarding pending claims, I am confronted by the adjuster, and sometimes the adjuster’s superior as if I am the enemy, and have no business asking questions about my client’s claim. At times I have even been accused of crossing some non-existent line that somehow prevents me from trying to assist my client, even receiving a cease and desist letter on one such occasion. This is just the opposite of what should happen. We as agents have an obligation to our clients to advocate for their best interests. Likewise, the insurer has collected premium in exchange for a “promise to pay” since “in buying insurance an insured usually does not seek to realize a commercial advantage but, instead, seeks protection and security from economic catastrophe.” We are all in this together, and we should be working to explore ways to find coverage or resolve the claim with the best possible outcome. Likewise, we as agents are the insurance company’s sales force, and they should stand behind us. What has happened to our industry?
Not to be completely gloom and doom, there are many very capable, well trained, and right minded insurance adjusters out there, and in fact my interaction with one such adjuster at Travelers (to give credit where credit is due) this past week is what really prompted me to write this article. He and I have been working together in an attempt to find coverage for one of my client’s claims. That is the way it is supposed to be. While we may or may not be successful, it has been an invigorating experience which has given me hope.
I also know that there are very few (if any) insurance company executives that give standing orders that their adjusters should look for ways to deny claims. Most executives will attempt to do the right thing if a contested claim is brought to their attention. I’m sure most would be appalled at the way some claims are handled by the above mentioned overzealous adjusters if they ever became aware of what was really going on.
I guess what I am trying to say through all of this is that we need to work as a team, and our overriding concern should be for the welfare of our client/insured. We need to recite our industry standards often, and they should be every adjuster’s mantra. Middle management needs to be our watch dog and make sure the adjusters working for them apply these standards to every claim. Senior management needs to ensure these standards are supported from the top down, and should be available and visible should things go south.
Here’s to a kinder gentler agent-insurer relationship in the years ahead.