This is a difficult article for me to write for two reasons. The first is that I really love how insurance, when done well, can make peoples' lives so much better. The second is that by writing this article I am taking the chance that some people might consider this article libelous or a violation of the much-outdated anti-disparagement laws. A number of parties within the industry, not always the best players either, take advantage of anti-disparagement and libel laws knowin

There was a recent article in the Insurance Journal, about a tragic shooting in which a young child shot itself after finding a loaded pistol in the home where the child's family was visiting. One aspect of the resulting lawsuits is that the employer of the home’s owner was sued for the failure to ensure a safe work environment. The employer happens to be an insurance agency. Regardless of the merit of this specific suit, the risk exposure is real and huge given how large the

An insurance agent went to an attorney and asked him to draft a producer contract. A month later the attorney sent back a contract accompanied by an invoice for $4,500. The agent got what she requested. The attorney had fulfilled his duty. The agent did not know what clauses and conditions should be included in a producer contract (that is why she went to an attorney!). Ignorance was bliss for the agent until one of her producers left, with clients, and the judge held the con

"The thing to be known grows with the knowing." Nan Shepard, "The Living Mountain" Ms. Shepard wrote this now famous mountaineering book in the mid 1940's, though it was not published until the mid-1970's. It takes place in the Cairngorm mountains of Scotland. The quote above succinctly summarizes knowledge, any kind of knowledge, but is specific to people who are conscientious enough to continue to learn purposely. Learning purposely causes a person to realize how much more

I read about an E&O case where an insured asked for complete auto coverage but failed to explicitly ask for collision coverage, so the agent only sold them comprehensive and liability coverages. Why the agent did not verify with the client that they did not want collision coverage is beyond me, but the agent did not ask. The insured had a collision, discovered they had no coverage, and sued the agent for E&O. The agent's defense was that the insured asked for complete coverag

I watched a documentary about the late writers Jimmy Breslin and Pete Hamill. I was too young and too distant (my local papers did not often carry their columns) to read their work in their heydays. However, when I later read some of their writings, even when I completely disagreed with their perspectives, I admired their work, especially Jimmy Breslin's writing. I appreciated how he enjoyed fighting for regular people and what was right. I often disagreed with what he though

I saw a headline stating that Florida building codes are at the root of Florida's property insurance problems. I doubt that building codes are the root of the problem, but are they a contributing factor? Prior to Hurricane Andrew that wiped buildings clean of their foundations for miles, Florida's building codes were weak. Considerable angst was expressed among all concerned parties regarding the inadequacy of Florida's building codes. The state's politicians, to their credit

The property insurance situation in some coastal states is in a crisis. With another big hail season and/or fire season, much of the South and Intermountain West may see the property market freeze. For those in more northern climates, the property market is comparatively much better. Many of these problems are self-inflicted and the solutions can be provided by the industry. The self-inflicted part is that the industry has made too much insurance look easy, and appearances in

I recently read the Opinion of an Idaho Supreme Court case that reversed a lower court ruling which favored the Defendant, an insurance company. The issue involved UM/UIM coverage. The situation, as I interpreted their ruling, was pretty simple. The Plaintiff carried minimum UM/UIM limits of $25,000. They were hit and injured by another driver who carried minimum liability limits of $25,000. The at-fault party's insurance company paid $25,000. The Plaintiff then turned to the

Everyone has likely heard the saying, "Damned if you do and damned if you don't." Insurance agents who try to do the right thing (not the sloppy, incompetent agents who are only interested in making a sale, even if it is the wrong sale) are so often caught between these rocks and hard places. They try to advise their client they truly need additional coverage and lose the sale because that is not what the client wanted to hear and some other agent offered them a lower price w

A few months prior to initially drafting this article, a semi-famous economist, Janos Kornai, died. He was famous for explaining why socialist economies, which are heavily planned economies, do not work. He was also famous for making the connection between the failures of planned economies and the failures of businesses with too much capital or political capital protection. I found his analysis as to why planned economies fail, proven to be correct time and time again, to be

The future of insurance distribution is becoming extremely clear to me. A huge push is underway to generate as much in sales as possible, with literally zero regard for insureds' actual coverage needs. I am seeing this push with specific carriers within and outside of the independent agency channel. I can easily see this within the Insurtech distribution models, and it is absolutely crystal clear some agencies are planning to grow larger quickly, both with and without Insurte

Do You Believe Your Work Makes the World Better? I read a book review recently regarding a deep study of the workplace environment as it has evolved from hunting and gathering to typing into a computer. The author pointed out that people now have hobbies that used to be considered work as a balance to work that is not necessarily enjoyed. He also noted that people spend so much time working, it is next to impossible to not realize some form of self-identification, who we are,

And Why Professional Agents Should Take Advantage of Amateur Agents A recent Wall Street Journal article covered the disappointment, frustration, and resulting lawsuits pertaining to water damage claims that were incurred as a result of the deep freeze and energy debacle in Texas this past winter. The article did not address the latest black-eye reputational damage to the industry and, unfortunately, did not report a single good claim outcome. Interview after interview was co

The Proper And Improper Use Of Deductibles In Designing Insurance Coverages I recently read an article written by Mike Brown on the website "meetbreeze" regarding how little cash a large proportion of people possess. The study showed that 24% of Americans did not have enough savings to cover an emergency expense of $250 and 47% could not cover a $1,000 expense. The data was based on a study of 1,500 Americans. Those numbers correlate with common deductibles in personal insura

"When hiring a management consultant firm, ...clients do not know what they are getting in advance, because they are looking for knowledge that they themselves lack. They cannot measure the results, either, because outside factors, such as quality of execution, influence the outcome of the consultant's recommendations." Clayton Christensen of Harvard Business School as quoted in The Economist. As a consultant, I completely agree with Mr. Christensen's assessment. As a consult

Insurance distributors have worked hard and have been coached hard to appear as professional as possible without actually crossing over to the "professional" standard of care for E&O purposes. I do not believe this approach has served the industry well, though it has allowed pretenders to proliferate and make good money. The pressure to be an amateur agent is greater today than ever before and from a new direction -- cost. You often will see the pressure to be an amateur camo

Insurance is becoming obsolete on many levels. One measure is how many claim dollars and even claims per GDP are being paid. The number of claim dollars per GDP dollar has been declining steadily, excluding Auto PD, for the last fifteen years and is now about 15% less. Claims per $1,000 of NPW have decreased too. The average claim per $1 million dollars of GDP has decreased by about 30%. Insurance is just not as important if claims are not incurred or covered. The best way to

There is a fascinating article by Russ Banham in the January 11, 2021, edition of Carrier Management magazine (https://www.carriermanagement.com/features/2021/01/11/215633.htm). It is well worth reading. If you don't have access to Carrier Management, the article focuses on Google's technology and the new leader of that division. It is worth noting the leader, Dr. Henna Karna, has a deep background in insurance analytics and actuarial studies. She is not just another Insurtec

I am honored to have clients who endeavor to be the most professional and ethical agents and brokers possible. I have noticed that many are tired. They feel like they are pushing a Sisyphean boulder. The playing field is not level, favoring the unethical and stupid. Here are a few examples where carriers and regulators might assist, and in doing so, assist the public. 1. Rebating. "What's in a name? That which we call a rose. By any other name would smell as sweet." --Shakesp