Author: Chris Boggs
Having worked as an insurance agent and for an insurance carrier, clearly neither side knows what the other side deals with on a daily basis. Agents think underwriters are nitpicky - asking questions just for the sake of asking questions. And underwriters are befuddled when agents get upset because of a sound underwriting and/or pricing decision (even though the agent thinks the risk is wholly reasonable or the price wholly unreasonable).
“Can we all get along?" (often misquoted as, “Can't we all just get along?") is a question made famous way back in 1992. Well, the same question applies to agents and underwriters today (27 years later).
Before peace, harmony and the singing of “Kumbayah" can commence, there must be an understanding about what both sides endure on a daily basis. Let's start with the underwriters' perspective.
I asked underwriters from all over the country to recount some of the strangest, most unusual, or simply irritating situations involving agents. Following are selected responses. (Don't worry agents – you will have your chance to respond; at the conclusion of this article I will give you details on where to send your “underwriter stories.")
Actual agent-to-underwriter communications as reported to me (I have to assume these are true because there is no way you can make up this stuff):
- “I received an application from an agent listing the named insured – and that was it. No address, no description of operations, no sales; nothing! When I called the agent to inquire about the missing information he said, 'Just give me your best quote,' but he didn't give me any of the missing information." Failing to provide even the most basic underwriting information makes an agent one of “those" agents.
- “The insured's account was split between us and another insurance carrier. The other carrier had misspelled the insureds name prompting the agent to call us. Rather than asking the other carrier to correct the spelling of the named insured, the agent asked us to purposely misspell the named insured to match the other carrier." Creating a possible coverage problem for your insured by making such a request makes you one of those agents.
- “An agent requested motor truck cargo coverage. The submission stated that the insured travelled by road – from California to Hawaii." If you are unaware that there are no paved roads between California and Hawaii – you are one of those agents.
- “We received an application from an agent with a cover letter explaining why we were asked to quote. According to the letter, the insured had experienced a high frequency of large losses. So, not only did the insured have a frequency problem, they suffered from a severity issue. Even this request might be OK, except the cover letter went on to specify that we needed to match the expiring policy's terms, conditions and PREMIUM." If you are an agent who thinks it makes sense to ask an insurance carrier to go into the policy knowing they are likely going to lose money – you are one of those agents.
- “The agent needed a special event policy. The insured event was to take place at 5:00 the afternoon of September 1 (a falsified date to protect the guilty). On the application, the agent requested the expiration date be September 1." Agents unaware that a policy expires at 12:01 am of the expiration date (17 hours before the event being insured) qualify as one of those agents.
- “An agent sent an email that read, 'Writing to confirm the coverage is renewed for the above policy…. I have received the policy and endorsements….'" If you have received the policy (and no non-renewal notice), would you figure the policy had renewed?
- “When medical marijuana risks started popping up, I received an application to cover the proposed insured's stock. However, the named insured was not a business name, and there was no storefront. The insured was just some guy and the address was a street corner." If you hang out with these types of “insureds," you are one of those agents.
- “I asked the agent the entity type of the named insured; his assistant asked, 'What's an entity?'" I'm not going to say it.
- “The agent asked, 'Are the owners automatically additional insureds on this policy?'" Well, if you haven't ever read the policy you would ask the same question and be…one of those agents.
- “One time we needed a signed application, so the insured took a picture of himself holding his application with his signature." This may actually be genius.
- “The agent called and asked, 'What city is Lloyd's of London in?'" I really can't add to this.
- “The agent said, 'For some reason your site won't let me print auto ID cards.' This sounded like a legitimate problem; but then the agent continued, 'I wanted one for the rental vehicle. Would he need an ID card for a rental?'" Well, at least the agent did ultimately ask if one was actually needed. (I did some follow up, and yes, the website did get fixed.)
- “One of my agent called and asked, 'The engine in my insured's car is making a noise; does your policy cover knocking and pinging?'" I guess the answer depends on…; actually it doesn't depend on anything. Please tell me you would never ask this.
- “The producer called to tell me our insured (a church) was starting a renovation project and wanted to discuss a few things with our loss control department. I suggested that the insured and loss control rep speak first by phone to see if the insured's questions could be answered without a site visit. The producer said that was perfect. The only advice the insured wanted from the loss control rep – whether or not they should replace two temporary basketball goals with permanent ones." I guess that's a legitimate concern.
- “Our agent sent us a policy on what was to be a Landscape Gardner (GL code 97047). Upon audit we discovered that the insured did do SOME landscape gardening, but they also built decks and installed underground lawn sprinklers. Both of these activities are specifically excluded from inclusion in 97047 in the PAAS manual. Not only did the agent not apply the correct codes. He grossly underreported payrolls. The agent could not understand why we had to reclassify the insured and charge an additional premium." Knowing the classification rules keep you from being one of those agents.
I know agents have the same kinds of stories regarding their underwriters. Read, “Does this Sound Like YOUR Underwriter?" to get the whole story.
Once both sides see what each has to work with, maybe some understanding will break out and we all can get along (and maybe learn to laugh at ourselves).
Republished with permission of Insurance Journal's Academy of Insurance
Last Updated: July 5, 2019