Posts Tagged ‘risk management’

It is my experience that most licensed insurance agents are usually able to answer their client’s coverage questions correctly.  Meanwhile, many problems arise simply because consumers simply do not know the right questions to ask to get the information they really need Should it be the consumer’s job to know the right questions to ask?

In reality, learning how to help their clients ask the right question is a skill that few insurance professionals ever master. As Hurricane Irene was chewing up the coast in NC this summer and heading north, our staff received numerous calls from clients asking “Am I covered for a hurricane?”. The question our clients really wanted answered:  “How will my coverage protect me for losses I may sustain from a hurricane?” Knowing this was what our clients really wanted to know, we were able to re-frame the question and provide a much more complete answer.

Of course, more complete answers can sometimes be disconcerting, especially when they are only being provided as a hurricane approaches.  Few consumers take comfort in being reminded, for example, that while a homeowner policy does provide quite a bit of coverage for damages caused by a hurricane, NO policy provides the mythical “full coverage” we’d all like to have.  The “Fine Print” of any policy explains in detail the damages that are and are not covered, and coverage varies widely among carriers.  Consider the following:

  • Unless you have specifically requested to purchase flood insurance, you will not be covered for losses that are caused by water that rises from the surface and enters your home by your homeowner policy.
  • Conversely, rain water that enters your home through a damaged roof or window is not a “flood”, and is covered by almost all homeowner policies.
  • Almost every homeowner policy in the NY Metropolitan area has two deductibles: one that applies to losses caused by a hurricane, and one that is applied to all other covered losses.  All consumers should know well in advance of a hurricane what their deductible will be for losses caused by a hurricane.
  • Because Hurricane Irene had been reduced to Tropical Storm status was when she reached NY, covered losses were adjusted using the (lower) deductible that applies to all other losses.  Next time we may not be so lucky….
  • Homeowner policies do not provide coverage to replace trees damaged by wind, hurricane force or not.  There is, however, limited coverage to remove downed trees, though policies vary widely on the circumstances under which this coverage is available, and how much coverage is provided.
  • For the many who lost power, can I suggest the purchase of (at the  least) a portable generator before next hurricane season?  Homeowner policies do provide limited coverage for food spoilage caused by a power outage, but by the time the deductible is subtracted from the claim, the cost of a portable generator would have been paid for and no spoilage would have occurred.

Two primary takeaways from all of this:

1. To make well informed decisions, insurance consumers need skillful guidance to ensure they are not only getting the right answers…. but also to the right questions.

2. It is just as important to examine the right questions BEFORE a risk arises.

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The International Risk Management Institute (IRMI) is regarded by many as the premier authority in providing expert advice and practical strategies for risk management, insurance, and legal professionals.  

I was honored when Robin Olson, the principal research analyst for IRMI’s Personal Risk Management and Insurance practice contacted me and asked me to provide a peer review for an article he was preparing for a leading insurance industry trade publication, The CPCU e Journal, published by the CPCU Society.  This 18 page white paper, Personal Lines Insurance Coverage Gaps – Analysis and Resolution, was written to educate insurance and risk management professionals, and offers very detailed insights into this very broad topic. 

While this article is surely not recommended late night reading, several insurance-geek friends of mine have called to congratulate me for my work being cited (on pages 2, 4, 7, 9, 16, 17 and 18) with the likes of Freakonomics authors Steven Levitt and Stephen Dubner as a research source for this paper. 

Let me know if you actually read all 18 pages, and I will write a check to the charitable organization of your choice for your interest and efforts!  Meanwhile, please realize that if it takes 18 pages to educate insurance professionals on the common gaps in protection, then it requires a lot of close attention to many details for insurance professionals to design and manage a well crafted insurance program. 

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Given the tumult that is occurring in the marketplace, many clients are re-discovering the importance of aligning their insurance coverage with carriers that can best document their financial stability and strong claims paying ability.

With fortuitous timing, a new provider of comprehensive insurance coverage can also demonstrate remarkable financial stability, and is now open for business: ACE Private Risk Services.

All professional advisors and consumers who want to be aware of quality providers of insurance and risk management services should take a moment to learn about ACE Private Risk ServicesThis financial fact sheet tells just a part of the story, but an important part. Contact me for more details on the quality insurance solutions and greater peace of mind this carrier can provide.


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When asked this common question: “how much liability insurance do I really need?” I respond with another question: “how much might you be sued for?”  Everyone knows that protecting the asset base from the threat of lawsuits, however unlikely, is simply prudent risk management. Deciding how much protection is needed is a little trickier. I have yet to meet someone who was named in a lawsuit who was not immediately concerned with whether they had “enough” coverage.

Deciding “how much do I really need?” requires a close examination of a number of issues, which we can help you address. Among those issues: what is happening in the real worldThis link offers a quick reminder that when it comes to what and how much you can be sued for, you never know….

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Among the common problems I hear from others about their insurance program: “no one ever explained that to me”. The response offered by too many insurance agents: “you never asked”.  Clearly, what you don’t know can hurt you…

Trusted advisors and consumers need to either work with a risk advisor who can help them by providing the right answers to the right questions (me, for example), or know where to find the right questions to ask.

Through the internet I have met an “insurance consultant” in Maine who does a good job helping consumers (mostly business owners) better understand how to make intelligent decisions on managing the risks they face. To generate interest in his fee based consulting services, he offers some of his information for free. With the author’s permission, click this link: “126 Questions to Ask Your Insurance Agent” for your copy of that article

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