Ben Franklin: Electricity, Insurance, Proverbs and Extensions of Time

Benjamin Franklin is credited with many things: For example, we all learn in grammar school that Franklin demonstrated lightning in a form of electricity and that, as an inventor, he created one of the first electricity generators. Another thing most people in our industry recognize is that he helped conceive and form the first mutual insurance company in America in 1752.

Now, my home was damaged during Hurricane Sandy. I was not victimized by flood, but my neighbor’s trees fell on my home. As a result, we suffered damage in excess of $10,000 and went without electricity at my house for several days. So, I’ve been thinking about Ben Franklin a lot lately, with a good measure of gratitude. Recently, I received an email from Pure Insurance, the carrier that handles my personal homeowners insurance. It said that since I’m a member of the company, it was offering me the following benefit after my claim: Pure will send an arborist to my house to check all of the trees to ensure I am not in danger of suffering future damage from them; or they offered me an alternative option: a whole house generator system at a five percent discount through a deal they made with General Electric. (By the way, Ben Franklin is also considered the founder of General Electric).

After what we went through on Long Island, having a generator will provide me with tremendous peace of mind. Long Island’s electrical infrastructure is old and wires are all above ground. With the weather trends as they are, we are certain to have more weather-related damage; and I’m grateful both to Ben Franklin and Pure Insurance for their contributions to my serenity.

Pure also said they will apply $2,500 toward the cost of either one of these two services. Like Ben Franklin, this is a company that has foresight, and takes customer relations beyond any other I’ve ever seen. I am thrilled. Additionally, every Pure employee with whom I’ve worked has been upbeat, positive and knowledgeable about what to do to help me throughout this claim. I can honestly say this commendation is my first in this column: Hats off to Pure Insurance.

While I focused on Pure because it is my carrier, there are many, many carriers doing positive things like this for their insureds. And while we’re pleased with our insurance claims experiences after Sandy, readers of this column know there are many on the Island who understandably are not as happy. But overall, I think our industry has done pretty well, even five months later, considering the overwhelming amount of claims the storm caused. After all this time, though, there are lessons insurance consumers, professionals and even policymakers are still learning.

Take for example, the situation we face with the New York State Department of Financial Services’ moratoriums on terminations and cancellation of policies. This is perhaps the best time to point out that Ben Franklin also is often credited with the quote: “Never put off to tomorrow what you can do today.”

It is my understanding that when the department issued the moratorium on Nov. 3, 2012, it was an unprecedented event. It has since extended the moratorium eight times, first amended to include commercial lines and then six more orders; each reducing its scope to fewer specific counties (and then ZIP codes) that had been acutely affected by the storm with each extension after Dec. 16.

The moratorium prohibited carriers from sending out notices of cancellation or nonrenewal. This benefits policyholders who would have been required to pay premiums earlier, now they are expected to pay them, in full, as the moratorium was lifted in their respective areas. This understandably has led to confusion, despite the NYDFS’s efforts to clarify and advise on the situation by issuing circular letters. While the department has urged carriers to provide notice of premium due and allow repayment plans or further extensions, these acts of leniency are no doubt up to the carrier and will be interpreted differently by various individuals and businesses.

PIA has fielded many calls from agents with questions and put together a “Q&A,” with input from both the department and the New York Insurance Association. But the situation gets even more confusing when we remember that many properties on Long Island have been placed in the non-admitted market and excess- and surplus- line commercial policies are excluded from these rules; and that there are companies that have multiple properties in and out of the impacted ZIP codes covered by the moratorium. If, says PIA, the policyholder has a separate policy for each individual location, then the moratorium applies to each one as a separate entity, but in the case where one policy covering all the locations and the headquarters is located in a ZIP code still under the moratorium, then the remaining locations also are covered.

There are many unanswered questions, even now after the moratorium has been lifted. One example has to do with automatic renewals, which the department also suspended. If the renewal would have occurred while the moratoriums were in effect, and the carrier hasn’t proactively done anything to notify the insured, does this mean the policy will be renewed automatically, or is there a date the renewal goes into effect? It’s sticky stuff—and, as usual, agents are going to be in the middle of the confusion between carriers and their insureds.

While I doubt Ben Franklin considered these complexities, I wonder if he imagined how apropos his words would be in the insurance world of 2013.