Where The Rubber Meets The Road

Ijust finished my weekly IIABNY Live! webcast where we talked about this same subject – claims handling. Unfortunately I am very familiar with this subject as I just had both a homeowners and an auto claim in a month’s span. Before you jump to conclusions and assume I am a bad client I want to let you know that neither claim was my fault or within my control to avoid.

A little over a month ago I received a call at 8:00 AM while away in Lake George buying tickets to the Rachel Ray fundraiser she does every year for her high school. It was my son who informed his mother and I that he and his brother had awoke to water pouring out of the lower freezer drawer and several inches of water on the kitchen floor spilling over into the dining room. Apparently the water valve that controls the water to the ice maker malfunctioned and the water didn’t shut off like it should. This was on our main refrigerator which is merely 18 months old (they don’t make appliances like they use to).

Jump forward to approximately 2 weeks ago when my wife and I are traveling down a main street in Syracuse when a young woman on a learner’s permit and with no licensed operator in the car, just her 2 year old son, runs a stop sign and we meet in the intersection. I’m able to slow my car considerably and I hit her over her rear wheel well. My car sustains roughly $2500 damage and will take a week to repair. I am looking at fronting a $500 collision deductible until my carrier can recover it from the adverse carrier.

Both of these claims are fairly routine and there should be no reason for the claims handling to cause me any undue stress or aggravation. Unfortunately one was handled extremely well and the other had issues. Which one do you think I remember first? That’s right the auto claim which is the one that had issues. How do you think I would have felt if I was your average customer and the auto claim was the only one I had? How many people would I have told?

The point is, there are really only 3 major advantages an independent agency can offer their clients; coverage knowledge and advice, choice of insurance carrier and handling and advocating on a claim. The last one is really where “the rubber meets the road” as up until then insurance is just an expensive piece of paper with a promise to pay. I believe that is why so many consumers are easily convinced that all coverage is the same and the only difference is price. If they have never experienced a claim they really have nothing to reference. If they have had a claim and the experience has been bad or they were treated unfairly then they really think insurance is a rip-off and they look to pay the cheapest premium possible. Most consumers who have not been exposed to a serious loss believe it will never happen to them.

Excellent agency claims service is the key to exceptional retention and the positive word of mouth advertising is guaranteed to get you referrals. How would you rate your claims handling? To fairly rate your claims handling you have to think like a client who has just experienced a loss. Their car, house or business is damaged and possibly unavailable for use. Their lives have been disrupted and won’t be back to normal until the adjustment is complete and the damage has been either repaired or replaced. Life today is stressful enough and a claim that is poorly handled can put a client over the breaking point.

The key to having a satisfied client is to have a claims procedure that minimizes any potential problems and keeps you in touch with the client through the process. It’s best to acknowledge the disruption they are experiencing. You should briefly guide them through how the process will go and let them know that if they have any issues or problems you want them to contact you right away. By guiding them through the process you establish the appropriate expectations on their part. One critical item is to return calls as soon as possible. Even if you don’t have an answer yet or are waiting for some information, contact them and acknowledge their call, being candid with them about what is happening. No one likes to leave a message and not hear back for a day or two. Remember they are stressed and this is the only time that piece of paper and promise will materialize into real action.

Be prepared with as much information as possible up front so you can guide them through the process. Know your carrier’s strengths and weaknesses and try and overcome them before they become an issue. Let your client know that you are there for them and check periodically on the progress of the claim.

Your claims department, or your agency if you don’t have a claims department, should be communicating regularly with the claims departments of your carriers. When you see a problem you should deal with it immediately and eliminate any future issues. At least once a year you should ask your staff to objectively rate the claims handling of your various carriers. That rating should be shared with each carrier so they know their strengths and weaknessesstand compared to the other carriers in your office.

Prior to our IIABNY Live! webinar an agent member wrote in and outlined his agency’s claims procedure. I think it touched most of what I mentioned in this article and it shows the items outlined can be achieved. Here is what he wrote:

We have a dedicated claims person. She handles all incoming claims, whether they be direct from the customer or indirect from the company. Checking in periodically during the claim is routine. We started implementing Claims Download whenever a company has it available so when the claim is over we follow up then too, which includes a survey on the client’s claim experience. To date over 99% of returns said they had a positive experience and would recommend our office based on that experience. Our belief is that you have to shine when it comes to claims, and dedicating an experienced person is the best way of doing this.

How would your customers rate your claims service? Is it a priority in your agency because I can assure you it is with your clients? Remember up until then it is just a piece of paper and a promise. Excellent claims service is a cornerstone of a successful agency. If you want to keep your current clients and be successful in adding more you need to give claims handling the serious attention it deserves in your agency.