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A Customer Service Nightmare

I received a renewal billing on my Business Owners Policy from my insurance company. Examining the billing, I found four very surprising things: (1) I had a new agent,(2) the policy period had been changed from 3 years to 1 year, (3) the deductible had doubled, and (4) the annual premium had risen by 25%. Here's the full story....

On May 22 I received a renewal billing on my Business Owners Policy from my insurance company. I put it aside to pay the premium the following week. On May 29th, I looked at the billing and found out four very surprising things: (1) I had a new agent, (2) the policy period had been changed from 3 years to 1 year, (3) the deductible had doubled, and (4) the annual premium had risen by 25%.

While the billing had included the name of the new agent, it did not include their phone number, so I had to call the prior agent to get their phone number. I was told that my account had been sold to the new agent approximately 6 months ago. I asked, "Why wasn't I notified?" The response, "Ask the new agent."

I called the new agent and asked to talk to someone regarding my account. When the CSR got on the phone, I asked her about the transfer, policy changes, etc. Her reply, "Sorry 'bout that."

I then asked CSR #1, "I'd like to know some information about my policy." I proceeded to ask questions regarding coverages. Since I hadn't received a copy of the renewal policy yet, I wanted to know any new extensions, limitations or exclusions that might apply. She said, "We write a lot of different types of coverage and I can't be expected to know them all." I said, "Then please tell me if accidental breakage of computer equipment is covered." She told me that she would have to call the company and call me back later that day.

THREE DAYS LATER, I called the new agency and asked for the supervisor. I reported the lack of returned phone call and asked her the same question. I also asked her why her agency didn't notify me that they had purchased my account and she responded, "The selling agency was supposed to do that." I was dumbfounded that the new agency didn't send me a "Howdy, glad to have you as a new client" letter.

The supervisor said she would check out my initial question and the second question I had regarding liability coverage for my web site. That afternoon I received an email from her stating:

"You had asked if accidental breakage of computers was covered. The underwriter is checking on this. The form doesn't say it does cover accidental breakage, but it doesn't say it doesn't cover it either (all risk policy). I will let you know, hopefully by the first of next week.

"Your question about your website. Your liability policy would cover any bodily injury or property damage the website would cause the general public. The policy would not cover any errors or omissions (E&O) coverage. If you have any further questions, please do not hesitate to give me a call or email me at XXXX@XXXX.com. I will be on vacation next week (June 4th thru June 8th). If you have any questions you may talk to YYYY ZZZZ (YZZZZ@XXXX.com) and she will be more than happy to help you."

Later that day I received an email from CSR #2. It stated, "We called our Insurance Company underwriter and asked about the situations that you spoke to us regarding your computer coverage, specifically accidental breakage. Our underwriter suggested that you call the claim department directly at 000-000-0000 for specialized claim situations. We sincerely apologize for the vagueness of this answer, but we do not want to assume coverage, that is their job. Please be sure that we will continue to provide you with the best of service possible, and please be sure to call if you should have any other questions."

I grudgingly called the phone number on the following Friday, only to find that it was a fax number. On that Monday, I finally received a copy of my new policy. Guess what! The cover letter was addressed to a John O'Neill.

I then asked to speak to the agency owner. After I explained all that had happened, he basically told me that if I was unhappy, I could place my coverage elsewhere. No, "I'm sorry." I said that I would still like an interpretation of coverage regarding breakage. He said that the company always denies those losses. I asked him where in the policy does it say that it's excluded (It is "Special Form" Policy). He said that he didn't know, but he would get it in writing from the insurance company. It is now 19 days since I discussed this with the agency owner, and still no clarification.

For obvious reasons, I have left off the name of the agency and Insurance Company. What are the lessons to be learned from this?

1) If you buy an agency or a book of business, it's YOUR responsibility to notify your new customer.

2) When dealing with a customer, do what you say you're going to do, when you say you're going to do it. Don't promise more than you're willing to do and provide more help than the customer expects.

3) If you don't know the coverages, don't sell the policy.

4) If there is a material change in the policy, notify your clients prior to renewal or at least include the changes in the cover letter that accompanies the renewal.

5) Never tell a client that if they don't like the poor service to go somewhere else. That person might write a newsletter and pass the info along to thousands of buyers of insurance and their friends and colleagues.