Sandy’s Silver Lining

Super Storm Sandy caused death and destruction over a wide area of the Eastern Seaboard. Lives were disrupted, some forever. As always happens when tragedy hits, those who were lucky enough to not be directly impacted come together to offer help and support to those affected. It was just that concern for those affected that was the creator of our Hope in a Bag campaign providing 1000 bags of food for victims of Sandy. Everyone involved in the campaign should feel good about their participation in such a worthy endeavor.

Our members and their staff located in the path of destruction went above and beyond to make sure their clients were taken care of as quickly and completely as possible. They offered this exceptional service even though many of them were victims of the storm as well. Their commitment to helping those affected was shared by the insurance industry as a whole. My understanding is that most victims’ damage was taken care of as promised and in certain situations there is a belief by some beyond what was promised.

I believe even terrible disasters like Sandy provide the opportunity for positive outcomes. For example, the response of our industry to make the victims whole again confirms the importance of what we do. It is too easy to lose sight of the important role we provide and why it’s important that we work hard encouraging clients and consumers to properly protect themselves.

Independent agents, brokers and their staff should feel good about the protection they provide. Even where a client didn’t purchase protection that was available if you provided all the facts and worked hard to get them to see the need you met your obligation. It hurts to see clients not compensated when coverage was available but ultimately the final decision is theirs to make. In retrospect if you didn’t work hard to get them to purchase the coverage they needed, maybe because you allowed price to override protection, then now is a great time to commit to not making that mistake again.

The damage Sandy inflicted has drawn the public’s attention to the importance of having the right protection. Unfortunately that attention can be short lived so it is important that you strike while it is still in the forefront of your client’s mind. Clients and consumers have become very aware of the need for flood coverage, business interruption coverage, replacement cost coverage on their homes and buildings as well as a number of other insurance protections that they may have ignored or decided against in the past. Take this opportunity to discuss adding important coverage they may be missing.

Let’s also hope that from Sandy’s damage consumers may have realized that insurance is not a commodity to be purchased solely on price. The marketing efforts of those companies that sell predominately on price have done a great disservice to consumers. Unfortunately that is all they have to offer and so they spend hundreds of millions of dollars to convince consumers of this. I’m sure that there isn’t one victim of Sandy that wouldn’t pay $50, $100 or even $200 more for coverage if they could get items covered that they are currently being told won’t be covered.

Sandy has also drawn attention to many of the unresolved issues inherent to coastal property in the New York Metro area and Long Island. With the possibility of windstorm/ hurricane deductibles actually being triggered, the Department of Financial Services and the Governor have become very aware of the devastating affect those deductibles would have on people. Let’s hope our state legislators have also realized the seriously negative affect these deductibles would have on New Yorkers impacted by a serious storm. There could be no better time for us to open up serious and significant discussions with all the necessary parties on what is a very important issue. At the very least maybe now we can get action on standardizing the triggers for these deductibles.

Another very real factor that Sandy has highlighted, and may get worse if we don’t act, is the availability of affordable property protection in the affected area. The ultimate solution would be affordable protection through an admitted carrier subject to the New York Department of Financial Services and protected by the Guaranty Fund.

These discussions could be very delicate and the participants involved have very different interests and viewpoints. As agents and brokers we want the ultimate solution I previously mentioned so we can go out and provide protection for as many of our clients and consumers as possible. The Department of Financial Services (and the Governor) want consumers provided with protection that makes them whole and keeps them from suffering severe financial loss that ultimately will fall back on the government to be handled. The insurance carriers want to offer protection in which they can accurately determine the ultimate cost associated with the risk they will be assuming and price the product appropriately. Getting all 3 parties to come to an agreement will not be easy but it’s absolutely imperative that we try and work out some viable solution for everyone’s benefit.

Sandy was a terrible storm and its affect will go on for quite some time. There are those who will never recover completely and our hearts go out to them. We should learn from what occurred and we should work to improve the insurance process wherever and whenever we can to improve the protection available. I believe the opportunity exists for some meaningful discussion that could result in positive change but we must move quickly while the issue is still fresh in everyone’s mind. If we are able to negotiate some meaningful change as a result of these discussions we will have definitely found a major silver lining to the destruction of Super Storm Sandy.