Disaster Preparedness – What You Can Do For Your Agency and its Customers

The past few days have brought us both the best and the worst that Spring has to offer.  The weather this past weekend, at least in the Atlanta Metro area, was just about perfect.  But yesterday both on the news and here in Georgia, we were reminded that the weather can turn violent and deadly.  Fortunately, so far, Georgia appears to have escaped the worst of the latest weather system that spread death and destruction across Arkansas, Mississippi, Alabama, and Tennessee.

However, we can’t count on being lucky all the time.  Every business owner should develop a plan for what to do in the event that a weather related or other disaster strikes and this is especially true for insurance agencies, whose business it is to provide protection from loss.  There is no better customer relationship building experience than for an insurance agency to withstand a disaster and be there for its customers in their time of need.  For agencies looking for ways to provide value added service for their customers, giving them tips and other information on what they can do to protect their family and property when disaster strikes is a great way to start.

There is no shortage of resources to which an agency can turn to prepare itself and its customers to deal with a disaster.  The Agents Council on Technology has created a disaster planning checklist geared toward insurance agencies.  There is also an article posted on its site by an agent who explains how having such a plan enabled him to  serve his customers almost immediately after Superstorm Sandy.

For your customers, the Missouri Department of Mental Health has created a tip sheet for emergency preparedness that is short and to the point.  For guidance on how to prepare for a specific type of disaster, the Federal Emergency Management Agency has created a program known as America’s PrepareAthon.  It’s website contains information on how to prepare for tornadoes, hurricanes, flooding, and wildfires.  It also has maps that show how often those hazards have occurred in each county in the U.S., so your agency can tailor its outreach to its customers on the hazards most likely to occur where they live.

One of the many non-government resources for disaster preparedness information is Agility Recovery.  It has a webpage of resources devoted to preparing for disasters, with many checklists and white papers that can be downloaded.  Some of these resources may be more appropriate for your agency’s business customers.

Now is the time to act to protect both your agency and its customers in case a disaster strikes.  Do something that will set your agency apart from its competitors by preparing for a disaster and informing your customers what they can do protect themselves in the event the unthinkable happens.



Insurance Certificates – the Insurance Commissioner’s Latest Actions

In a post a couple of weeks ago, I told my readers to stay tuned for further developments from the Insurance Commissioner’s Office on the subject of what could and could not be included in the Description of Operations section of the ACORD form 25 Certificate of Liability Insurance.  IIAG had been in touch with that Office about some inconsistencies that had come to light between its latest guidance on that subject and the instructions for that ACORD form.   In particular, the statement that it was illegal to include in the Description of Operations section ”any information other than a brief explanation of the operations of the insured; this section is not to be used for describing the insurance policy.”

That statement no longer appears on the website portal created by the Insurance Commissioner’s Office to facilitate the reporting of suspected violations of the law and regulation on insurance certificates.  Instead, it has been replaced by the statement that it is improper to use “a form that certifies that insurance coverage complies with the provisions of the insured’s contract with the cert holder, rather than summarizing the policy (a certificate is a synopsis of coverage under a policy; it is not (sic) document stating that a policy complies with the contractual obligations of the insured to obtain specified insurance coverage).”  This new statement forbids the inclusion of any language on an insurance certificate that does not purport to be a summary of the provisions of the insurance policy or policies referred to in the certificate.

Apparently, it is now permissible to include in the Description of Operations section of the ACORD form 25 statements that summarize a policy’s provisions.  However, the earlier guidance that it is improper to require “that a summary of a policy provision be added to the certificate which varies from the precise and complete language of the provision” remains.  My interpretation of these two statements is that an agent cannot put language on an insurance certificate that is requested by a third party unless that language is the “precise and complete language of the provision” of the insurance policy in question.  However, an agent is free to put language on a certificate that summarizes the provisions of the insurance policy in question, if that language is the agent’s own language and otherwise complies with the instructions for the completion of the ACORD form 25.

In deciding how to summarize the provisions of the insurance policy in question, an agent needs to keep in mind that it is illegal to put on a certificate “any false or misleading information” or anything “that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy of insurance to which the certificate makes reference.”  Therefore, any summary of the provisions of the insurance policy in question must be completely accurate.  I would recommend that agents who don’t want to have to worry about whether their summary of such provisions meets this standard to instead refer to the specific part of the insurance policy or an endorsement to it where the requested information can be found and either attach a copy of that part of the policy or the endorsement to the certificate or offer to provide a copy of those documents upon request.



Social Networking – Why Isn’t It Working?

In a speech at last week’s Legislative Conference in Washington, D.C., the IIABA Chairman, Tom Minkler, told the agents who attended that Generation Y, or the Millennials, who as a group are larger than the Baby Boomers, are “redefining consumerism” by relying on social media and other electronic or digital sources to get information and make their buying decisions.  He thought their approach was also fast becoming the new normal for most consumers.  (Click here for more on Mr. Minkler’s speech.)

Clearly, one of the places to which today’s consumer looks for information about products and services is social media.  Most everyone is familiar with Facebook and Twitter and there is LinkedIn for the more business to business oriented.  To these must be added Google+, which is seeking to combine many of the aspects of the other three.  In a recent post, a social media strategist for Project CAP, Tom Hodson, discussed the four major mistakes that agents are making in their use of social media.  First,  too much time is devoted to talking only about insurance related issues.  He makes the important point that, “Social media sites are not a soapbox to talk about yourself, your business and your knowledge. Rather, they’re a way to connect with people on a human level–to talk with people, not at them.”

Since too much time is being spent talking about insurance issues, not enough time is spent talking about the people who make up the insurance agency, especially the agent.  Agents need to distinguish themselves from the direct writers and captives that want to sell insurance to the same audience.  One way to do that is to let that audience know what kind of person the agent is by talking about what he or she does in the community, local or other events of interest to the agent, and important milestones in his or her life.

Another problem, which is understandable given all the demands on an agent’s time, is that the agent posts on only one social media platform, both to save time and because it’s easier to remember only one method for how to make posts.  The more platforms on which an agent makes posts, the more likely the agent is to be found by a Google or other search by someone interested in the products and services offered by that agent.  Mr. Hodson recommends that agents use four to six social media platforms, with the most important ones being those discussed above.  There are apps that allow a post made on one platform to automatically appear on the other platforms on which the agent has a presence. (Click here to view a post about those apps.)

Finally, Mr. Hodson makes the point that “Effective social networking requires regular posting and interacting.”  He recommends that agents post at least three times a week, every week, and has some suggestions for how that can be done using content aggregator sites, such as Trusted Choice for insurance issues and Mashable for items of general interest.  If you just don’t have the time, IIAG has a service, Agents Go Digital, that will do most, if not all, of the above for you.

Insurance Certificates – Latest Developments

In a post in early December last year, I discussed a website portal created by the Georgia Insurance Commissioner’s Office that contained basic information about insurance certificates and examples of actions that would violate the new law on insurance certificates and the regulation subsequently issued by the Commissioner’s Office, as well as an e-mail link to report suspected violations of that law and regulation.  In that post and an article in the Spring 2014 issue of the Dec Page Quarterly magazine, I expressed surprise at one of the examples of illegal conduct contained on the website portal.  The Insurance Commissioner declared it to be illegal to include in the Description of Operations section of the ACORD 25 certificate “any information other than a brief explanation of the operations of the insured; this section is not to be used for describing the insurance policy.”   This statement was reinforced by the declaration that it was illegal to request that a summary of any provision of the insurance policy in question be included in the insurance certificate, if that summary varied in any way “from the precise and complete language of the provision” in question.

The above statements were contrary to the common practice of using the Description of Operations section to provide information about the insurance policies referred to in the certificate.  In addition, limiting the information that could be provided in that section to “a brief explanation of the operations of the insured” was contrary to the wording found on the ACORD 25 form for that section which includes references to the locations and vehicles covered by those policies.  The instructions issued by ACORD for this form also state that this box can be used for “additional comments or special conditions that may exist upon the policy” in question.

It is my understanding that IIAG representatives have been in touch with the Insurance Commissioner’s Office about the above inconsistency and that some changes will be made by that Office to the above examples of prohibited practices.  When those changes will be made and their exact nature are unknown at this time, so stay tuned for further developments.  In the meantime, I have advised my clients that it is permissible to use the Description of Operations section to describe the locations and vehicles covered by the insurance policies in question and to refer to any endorsements or other additions to those policies that may affect their coverage, copies of which documents should be attached to the certificate.  At this time, I would advise against including in that section any description of the effect of the documents that are attached to the certificate.