Lessons learned from Irene (and Lee)

Recently, I played in a golf tournament hosted by Andover Insurance at the Wheatley Hills Golf Course in East Williston, N.Y. Scott Brekne, Regional Marketing Representative at Andover always runs one of the most prestigious outings of the year. In his next life, he should come back as an event planner! It was a nice opportunity for agents and company personnel to network, since it’s more and more rare nowadays, that we can have candid and important discussions with underwriters and executives that help us to help our clients. I would like to thank the agents who approached me to let me know they enjoy reading this column in the Advocate. The positive comments (and even criticism) I hear from colleagues in the industry keep me buoyed to continue writing. As I said to several people at the outing, I’ve been writing this column for at least five years and its a challenge to meet a copy deadline on a regular basis. I extend the invitation to all readers to please email me your ideas, because my goal for this column is to reflect all of us, not just my own experience.

But, back to the golf outing: I played in a great foursome—if anyone thinks age can stop one from playing a game of golf, they should have seen Phil Abatelli of Abatelli Insurance Brokerage, at the age of 85, hit a ball—He won many holes for us! Wheatley Hills’ golf course was beautifully manicured. While we were playing, we could see the trucks grinding and cutting trees and the tree company replacing damaged trees in a hurry after Tropical Storm Irene to keep the facility up to par. Some of us were ripping up the course, but I could see Irene had done damage before we got there. Of course, the opportunity was not lost on me to point out that we had dodged a huge disaster with Irene (and I’m not just talking about the storm itself). While New York State stepped in to clarify that neither Irene nor Lee were actual “hurricanes” when they hit us, our neighbors in Connecticut didn’t have such government clarification. Now, there’s a battle between the Conn. Attorney General and State Farm, which is standing firm about its higher hurricane deductibles … and if you think this is a p.r. mess for State Farm, you haven’t seen anything yet. Imagine trying to explain to your clients why their deductible is $10,000 or $20,000 more than their neighbor’s. We all know insureds have short memories and will forget previous discussions with their agents. Can you say E&O nightmare? I’ll say it again: We have to address the wide variations in deductibles carriers employ on their policies. Some have a $500 deductible, some say two percent; likewise, some use “named storms” as a trigger, some say “hurricane”—if there was a single lesson we should have learned from the recent storms is that we need uniformity on this issue. This is a top PIANY legislative priority, and I encourage all agents to call their representatives to help the cause.

Other lessons have to do with what you need to do before a storm hits. Of course, a key lesson is: Heed the advice you give your clients. PIA has heard some absolute horror stories from agents who didn’t have flood insurance. It’s bad enough to know you will have insureds demanding to know why they don’t have coverage and forgetting previous discussions about flood coverage, but imagine getting caught without it yourself. And remember, if you had help from FEMA this time around, they will expect you to have purchased flood coverage before coming to them again.

It’s wise to remind clients often about these lessons, too. Short memory syndrome is most acute in a crisis, but it can be helped with constant reminders. PIA has long offered stand-alone products and information in its consumer newsletters that repeat your advice to clients about flood insurance. These things don’t just serve as retention tools or lead generators; they can help you out of an E&O predicament when your client gets amnesia.

While I’m talking about flood policies, how many of us have taken on a new account, and renewed a policy with an existing flood policy for a client for which we become the broker of record? Do we really delve into the tiers and classifications, or do we assume that because the flood policy was accepted by FEMA or another flood carrier that it must be correct? It’s an important detail to remember. I recently heard of one agent who fell into the trap of getting a BOR on a flood policy that was not written correctly. When his client found out he was paying $1,000 more for his coverage than his next-door neighbor, who bragged after a claim that the flood policy is, “The best $500 I ever spent,” he was not happy.

After quick investigation, the new BOR determined that the original agent had incorrectly placed the client in the standard flood policy, rather than the preferred policy where he belonged. The agent was able to convince the carrier to change the policy for this year, but not for previous years. So, the client was out of luck for his previous years’ premiums. Of course, the client is now threatening to take legal action against the current agent for retroactive payment of the policy. A word to the wise: When taking over as broker of record for a flood policy, make sure you or your CSR reviews the policy closely to make sure the previous broker or agent was correct! (The same holds true for all types of coverage.)

And, remember: share even the unhappy details about flood coverage. Remind your clients often that claims adjusters might decide property damage is the result of sewer backup or sump pump failure and not from the flood directly, in which case the damage, according to the National Flood Insurance Program, is not due to the flood. And, the ISO homeowners policy excludes damage caused by water or water-borne material that backs up through sewers or drains or because of sump failure. Take the opportunity to sell the Water Backup and Sump Discharge endorsement—it can make you a hero in the case of a claim.

If you have the opportunity to play some late-season golf with some colleagues or carrier partners, talking about these lessons will make for great discussion since hurricane season is still in effect until Nov. 1. They are good reminders for business, but they also lead up to one of the biggest lessons we learned from the recent storms, aside from the importance of being prepared. That’s how important independent agents are to the claims process. Summed up perfectly by one PIA member, whose office was flooded, but he still managed to take care of his clients because of a comprehensive disaster plan: “Empathy.” It’s what we bring to our clients as neighbors and actual human beings, rather than websites or 800-numbers.

Speaking of human beings, the independent agency community received a press release from Lancer Insurance this week notifying us that our good friend, David Isenberg, is retiring after serving as the agency as president and chief operating officer for more than 30 years. Those of us who know Dave will agree the advice and help he has given each of us has contributed to our success as individuals and brightened each day that we have dealt with him. There’s not an industry meeting that Dave has not attended, and he is known as the face of D.C. White. We will be less fortunate not to have him as part of our day-to-day operations. Over the years, Dave has always been accompanied by Steve Shapiro, who now will replace him as COO. Steve is well qualified and we wish him luck in the new position. On a personal note, I’ve always considered Dave a close personal friend, and I wish him all the luck in the future—I know he and Arlene live for those grandchildren, and I’m glad he’ll have the opportunity to enjoy them.