insurance contracts

The Life of an Insurance Policy

A few weeks ago I participated in a panel discussion regarding insurance issues. The first part of the discussion was to center around “the life of an insurance policy” – I thought to myself what exactly is the life of an insurance policy and trying to have a little fun with it, I came up with this poem. I am sure many of you can relate.

The Life of an Insurance Policy

Mine is somewhat of a lonely life.

I am born from an insurance company to satisfy a need,

a need for peace of mind and financial protection against many worldly risks.

I am courted by, and eventually partner with, individual consumers and businesses alike.

The way I get matched up is sort of like a blind date, if I look good on the outside then I can’t be too bad on the inside

Once I am with my new-found customer I sit on a shelf, stuck in a file cabinet or I’m in a PDF file somewhere…

No one touches me, reads me, caresses me or understands me – a lonely life

But they know I’m there…somewhere…

Ah, but when there is a loss and claim – that’s when the fun begins.

Then I have so many friends…claims adjusters, agents, attorneys

Everyone is interested in what I have to say…they want to understand me better.

I feel fulfilled – everybody’s reading me when there is a loss, even fighting over me – I’m feeling loved.

Although, sometimes people get mad with me…I didn’t provide what they thought they had

And to them I say…you really didn’t get to know me, with all of the good and all of my flaws.

All I wanted in life was a little peace, love and understanding.

R. Scott Wolff, CIC, CRIS

Caveat Emptor: Let the Buyer Beware

An article posted by Property Casualty 360 states a simple truth — Insurance contracts are complicated documents, especially for the average consumer.

If you have ever gone through a disaster like a hurricane, flood, tornado, fire, power outage, or cyber attack you are probably familiar with the expression “Buyer Beware”. In fact after Hurricane Sandy, the Department of Insurance Commissioner stated that a commercial insurance buyer is sophisticated enough to understand the provisions of an insurance contract and regulatory protections are meant for the individual buyer. So, what was the Commissioner really saying? Businesses have the resources available whether they use them or not to become an educated buyer.

Regulators in a variety of states are looking to make it easier for individual consumers to obtain copies of policy language in advance of the actual purchase. It is not uncommon for a buyer to wait more than two months before seeing the policy they have purchased. In the insurance industry, most buyers (99%) get a brief description of what they are buying without understanding the full details. It is not until a loss occurs that they realize what they paid for was not right…buyer beware.

Here is a little tip … all insurance carriers can provide a sample policy in advance of a purchase. You just have to ask and then determine who is best to review. Is this an internal function, legal counsel, broker, independent advisor … what are the differences and where will you get the most thorough assessment of your coverage?

The phrase “Caveat Emptor” comes from the fact that buyers often have less information about the product or service they are purchasing, while the seller has more information … this is so befitting of the insurance industry when it comes to the buyer/seller relationship.

Take heed and remember “Caveat Emptor” each and every year when you purchase or renew insurance.