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  • Writer's pictureChris Burand

Bait and Switch

So much traditional insurance advertising is designed to imbue confidence. Whether the word "trust" or symbols of trust are used, the message is you can trust us with your insurance, which implies trust us to settle your claims fairly and well. In turn, this means we'll provide you with the coverage you need. This logic chain is not to be disputed unless, in arguing, you are suggesting that some part of this trust chain has a weak link upon which, should not be trusted.

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And it turns out, a weak link does exist. In fact, the industry time after time has dared insureds to pull the chain only to see that link break. That weak link is the case law standard of care that says insureds must read their policies, and by implication, understand their policies. By implication, this means insureds must also understand their risk exposures so that when they read the policies, they know what coverage is lacking and they are therefore motivated to call their agent and request the missing coverage.

In a nutshell, coverage is promised but when questioned, the industry asks the insured if they've read their policy and ascertained whether the coverage provided is adequate. Isn't it oxymoronic to say, "Trust me, and you still need to very carefully read and thoroughly understand your policy because you might not have the coverage you need"?

If I go to an attorney, I don't pretend to have a law degree. I'm hiring an attorney to assess my situation and advise of the best solution. I don't hire an attorney to give me a boilerplate answer that necessitates me to research the law, understand the law, understand all the legal language, and so forth. But that is what the insurance industry does when it is selling legal contracts.

I don't need a trusted advisor that when push comes to shove asks, "But did you read your policy?" I've taught insurance to agents for 30 years and most agents don't know their coverages well enough, often by a long measure, so the standard for insureds to understand their policies is not a fair standard. At the basic level, using personal lines, should they identify the address, vehicles, drivers, and whether they want $100,000 or $300,000 coverage? Absolutely. Should consumers understand the in's and out's of UM/UIM per the various forms and case law? I don't think so.

Someone told me today that I am wrong because by telling fake stories and suggesting coverage that does not exist, he has world class sales. Many people today do this and then hide behind the standard of "read your policy."

This industry would do itself a favor if it outlawed the bait and switch of telling people to trust us but then requiring them to read their policies in full detail to assess their coverage needs and the coverage afforded. If an agent says, "I will be your trusted advisor," then they should be doing the policy reading with the insured and completing a thorough risk assessment. Doing so leads to more sales and better relationships.

Otherwise, bluntly, agents selling coverage without assessing coverage needs are only worth 9% commissions. Sooner or later, carriers are going to figure this out.


NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand Insurance Education, Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.

None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.

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