Flood claims are awful. If you have ever had or dealt with water damage, much less a flood, you know the damage and repairs never seem to end. A house burns down and is rebuilt. A house floods and where does one even begin tearing down and then rebuilding? A reasonable person might think humans would avoid building in flood-prone areas, right? We all know that if a government provides subsidized flood insurance, at least in our society, people will definitely build in areas c

E&O claims will increase because private equity is funding plaintiffs' suits. It is really pretty simple. Many people and attorneys cannot afford to bring suits using only their own financial resources. Additional funding can greatly help them bring suits. More businesses have suffered losses, not necessarily insurance claims, due to the economic shutdown than any time since the Great Depression. A lot of pain exists. A lot of anger exists. If someone gives you a lifeline, yo

I have seen a few articles recently that have focused on and/or were titled "Hyper Personal" Personal Insurance. Like lots of things, it does not sound that good to me, but a creative marketing person has probably discovered this phrase sounds good to consumers. The idea is that someone or something, not necessarily an agency or even a person as it could easily be a software program, will hyper personalize a consumer's insurance experience relative to identifying their insura

So do I. I'd like the answers to life. I watched Monte Python's "The Meaning of Life" and I still don't have the answers to life's questions. I have read Socrates, Plato, Aristotle, Locke, Hobbes, Mills, Veblen, the Bible, and not least, Calvin and Hobbes. I still don't have the answers. I reduced my goal to understanding certain aspects of the tax code. One part in particular is running to 600 pages now, and I gave up because the lack of logic contained therein could only be

And here are a few reasons why: $2.3 billion was invested between January 1, 2019 and June 30, 2019 in litigation funds. That number is expected to increase materially going forward. These are funds to which investors give litigators money to pursue lawsuits in return for some portion of the winnings. These funds enable law firms to invest more time and more effort into more suits. The law firms don't get the investors' monies if they don't pursue more and more profitable lit

Or else better marketers will convince consumers they are more ethical than you. A recent story caught my attention and ire. The story was a press release from an Insurtech start-up. What first caught my eye was how the start-up measured success in coverage placed, i.e., total policy limits rather than premiums or commissions, to make themselves look successful. For people who don't know the difference, it was impressive that a 12-person start-up agency could place $2 billion

While some law firms are laying off and partners are taking pay cuts, two kinds of law firms seem to be reviewing summer boat catalogs: Lobbyists and Plaintiffs. Regarding whether coverage exists for business interruption claims, let's get past the argument common to two-year-olds where the answer to everything is: "No." This argument is pointless on multiple levels: There’s only about a jillion different insurance forms so any kind of uniform answer to whether coverage exist

Most insurance is sold poorly. That is not a judgment or an opinion. It is a provable fact, and based on all the E&O audits I've completed and education classes I've taught, the facts are clearly visible. There is little doubt if one looks at the data unemotionally. (Some people confuse an agent’s ability to sell insurance coverage correctly with selling coverage correctly -- two different facets.) Insurance sold poorly, over and over and over again, is evidence of a business

Every agency receives requests for questionable actions from its clients and their advisors, banks and sometimes even governmental entities. The best and most common example of these requests involves certificates of insurance. In most agencies, probably daily, someone requests a certificate of insurance where fulfilling that request would be problematic. The problem is on a spectrum from just slightly not right to downright illegal (legal vs. illegal at a criminal level depe

There are stupid questions, and there are questions that indicate the questioner is not that knowledgeable in an area in which they should already be knowledgeable. In both scenarios, the questioner still needs to learn. But our human egos are so powerful they keep most audience members (except the guy that always knows it all) silent. I see this when I teach classes and when I take classes. People are scared of embarrassment. They are afraid of their boss discovering their d

Archaeologists from the University of YaYa Positive Thinking announced they have discovered why the robust insurance distribution system known as Independent Agencies (IA) failed after nearly 175 years of success. The IA system was unique among sales and distribution systems of businesses of all kinds and lasted longer than almost any comparable industry distribution system. The players remained smaller than almost any other distributor too. For almost eight generations, the

Increase Sales! Absolutely, each and every sale will increase an agency’s E&O exposures. No question exists about this fact. The more surgeries a surgeon does, the more medical malpractice exposures he/she will have. In other words, to have a thriving agency, one has to accept the risk of ever-increasing E&O exposures. The goal should be that, with practice making near perfection, the exposure on any given account actually decreases with more sales. This decrease is not happe

Credit must go to Bill Wilson at InsuranceCommentary for this great line, "Knowledge by Folklore." These three words sum up, so perfectly, how coverage knowledge is transferred and how underwriting rules are learned. The resulting comedies and tragedies are protected by confidentiality agreements. Otherwise, the Greek comedies/tragedies would have serious challengers for the genre. I am not exaggerating. Some of the stories are so comedic, and others ruin lives. ​ Here are so

Some prospect calls Agency X to insure their home and auto. The CSR gets the data required to determine the replacement cost on the house, asks about liability limits, and hopefully recommends appropriate endorsements (but probably does not in the real world beyond replacement cost). Business A calls Agency X, or better yet, a producer in Agency X calls Business A. Let's name the producer "Joe." Joe solicits Business A and gets the opportunity to quote the account. Joe gets t

The title alone may elicit anger, bewilderment, curiosity and who knows what other emotions. The reason these movements and cultures are similar is they promise regular people some advantage based on an obvious current disadvantage. But then they take advantage of these same people. ​In his writings, Marx analyzed the serious disadvantages existing then that extremely few people could ever break through to achieve a decent life. People were actually shrinking in size, physica

Agents are a good target for the blame. I saw a question posted by an experienced agent: "Does an umbrella policy cover…?" The question indicates such a depth of ignorance any answer is simply wasted. There are about 500 or maybe even 5,000 umbrella forms in existence. Hopefully this experienced agent is not treating all these forms the same, but that is what the question tells me they are doing. I saw another question posted, "Does a homeowners policy cover…?" At the very le

I visit a lot of agencies and have interviewed hundreds of customer service representatives, account managers, account executives and processors every year. I find that 50 percent or more today have a serious lack of basic knowledge about certificates of insurance, binders and evidences of insurance. The lack of knowledge is more obvious at the staff level because these are the people who process these forms. However, a huge percentage of producers also don’t know the differe

In a November 24, 2006, Wall Street Journal article on page 1, Allstate outlined its new strategy: life insurance. Allstate’s plan is to leverage its great relationships with its current clients to sell them life insurance, annuities, etc. According to the article, they had considerable success growing financial service sales from $334 million in 1999 to $2.8 billion in 2005, contributing to nearly half their growth! So maybe Allstate is on to something. On the other hand, ha

Playboy magazine aims to make one of five subscribers a female. I do not understand the logic here, but at least they are thinking about whom they want as customers. A few smart insurance companies are also realizing that segmenting customers is important. For example, a few are segmenting customers into categories such as “How do they like to buy insurance” and “How much service do they want.” For those customers that like personal and professional service, these companies a

Some time ago, I read an article predicting independent insurance agencies would be gone in ten years. I doubt the author is right. However, I do believe many fewer independent agencies will exist in ten years, especially smaller agencies, because bigger agencies and banks will offer more products, probably at better prices, than many small agencies will be able to offer. In the last ten years, independent hardware stores have faced a similar challenge. Large stores offering