Wednesday, March 21, 2007

Musings on the insurance industry . . .

Before my mother died, I called my insurance agent to ask if I could endorse workers’ compensation coverage onto my homeowner’s policy when my mother required in-home care. My agent was out of the office, but one of the other agents in his office gamely offered to help. He said he would research my question and get back to me.

A few days later, he called. “No,” he told me, “[the carrier] doesn’t offer an endorsement to add workers’ compensation coverage to your homeowner’s policy. But you don’t need it,” he counseled me.

“Why is that?” I asked.

“Well,” he said, “you have medical payments coverage on your policy that is no fault and liability coverage in case you’re negligible.”

“Negligent,” I said.

“Right, negligible,” he responded.

I didn’t correct him again. Maybe, I thought, after working in this industry for twenty years, I am negligible.

My father was the first independent agent in Sun City, Arizona. When he opened his agency, my mother soon began working there, earning her license. As a child, I believed being an insurance agent’s kid was a special kind of torture. Not only was insurance the scintillating topic at the dinner table most nights, my mother’s “you’re going to get us sued” lament seems to be permanently embedded in my brain.

Dad carried extra shingles in his car, and after windstorms he would climb onto his clients’ roofs to inspect them. He was never without his “bag of tricks,” as he called his tool pouch. His clients depended on him and appreciated him and his family dearly.

Our phone rang in the middle of the night. One of his insureds called my dad and told dad that his house was on fire.

“Have you called the fire department?” my dad asked.

“No,” was the panicked reply.

“Hang up the phone and call the fire department.” My father got up and went to his client’s house to help him.

I can’t count the times, late Sunday afternoons, my father would take me with him to see his insureds. We’d glide down the street in his Ford to the sounds of Lawrence Welk drifting out the open windows. I recall how their faces would light up when they opened their door to him. His clients were more than their premiums, most were his friends.

I learned what a sideswipe and a binder were before I knew how babies were made. It wasn’t so much that I chose this industry, but I knew the vernacular and I took my first job in an agency, never dreaming that I’d be in this business twenty years later. But my father instilled in both my brother and me, who now owns my parents’ agency, if not his love of this industry, at least a deep appreciation and respect for it.

The industry he knew was built on relationships. You knew your underwriters and you flew to the home office of the carriers you represented to meet the employees there. You interacted with your carrier’s claims adjusters, who were still in the field meeting with insureds and claimants and who—gasp—had undergone months of training both by the company and by older adjusters who mentored and taught them.

You supported industry associations like the Blue Goose and the Big I, and took pride in your reputation, built on honesty. It went without saying that my parents conducted themselves ethically both with their insureds and with the carriers, even when it meant losing business.

My father loved this industry because of the relationships he built, both with other industry people and with his clients. Even when he could barely see, his eyes blinded by macular degeneration, Dad was still writing business.

“This isn’t the industry it used to be,” he’d tell me with a sigh as we sat behind his barn, his place to unwind. It wasn’t until I was much older that I understood why he came home so many nights and didn’t want to talk. I began to feel that way now, too, not long before I opened my own business.

A few years before she retired, my mother submitted a homeowners’ application to one of her carriers. The application was turned down.

“I was really puzzled,” she told me, “because it was a really clean risk. (She knew because my father had visited the home and photographed it before he submitted the risk.)

“I decided to call the underwriter, whom I’d never met, to find out why he declined the risk,” my mother told me. “When I finally got him on the phone,” she said, “I asked him why he wouldn’t write the business.”

“Well,” he told her with irritation, “The roof has a two-ton air conditioner on it and it could come crashing through the roof at any moment!”

My mother, one of the kindest people I’ve ever met, patiently explained to him that a two-ton unit didn’t mean it weighed two tons. After she slowly described the risk to him, the underwriter agreed to write the policy.

My colleagues and I laugh about the stupidity we encounter in today’s industry, the lack of training, the lost work ethic, the unethical actions of some insurers that give the rest of the insurance professionals a bad reputation. But it’s a gallows humor. Mainly, they agree they're counting the days to retirement.

Maybe I’m wrong to be so negative. Perhaps the next generation of agents and underwriters, even the insurance MBAs and CEOs who now run the industry, will be the caliber of people my parents were. Perhaps, like a pendulum, the industry will eventually swing back toward common sense, professionalism, fairness and solid relationships.

But just when I despair that our industry is the only one gone mad, I see that we’re not alone with our problems. One of the adjusters who used to work for me talked to a plaintiff attorney about his client, who allegedly had fallen into a manhole due to a faulty cover. The adjuster was chortling over the attorney’s mangling of the phrase “res ipsa loquitor,” which the attorney pronounced “res ipsa loquashitor.”

Laughing, I suggested he call the attorney back to tell him we had completed our investigation and were denying the claim because we weren’t negligible.

If nothing else, this industry is still good for a laugh.

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