Auto Industry is Hurting Folks. How Are You Feeling It?

[Rick Deckard]

Companies like GEICO and Progressive Direct compete almost entirely on price (or the illusion that they are cheaper than anyone else). When you compete on price and you can't operate any more efficiently than you already are, how do you continue to compete on price? By reducing coverage or "tightening" claims adjusting. If losses are escalating simultaneously, then you have to really reduce coverage and claims payments.

So, increasingly, we find that insurance, specifically auto insurance, is NOT the commodity that consumers are led to believe where the only material difference is price. This turns customers into victims. And not only customers...it victimizes innocent people who are injured or damaged by drivers with inferior coverage.

Regulators have done a terrible job of policy form review. They are allowing too many insurance products in the marketplace that exposure insureds and the people they harm to potentially uncovered catastrophic losses. We have mandatory minimum financial responsibility limits (that are far too low)...is it time to establish minimum coverage requirements?

To see examples of some of the differences, check out this article:

Price Check

This is a great post and I think at least on some level we should all have a discussion about different classes of people.

-Households making under $50k-$75k a year with kids, it's a total recipe for disaster. And a lot of it has to do with these folks wanting to experience everything the folks who make double $$ are getting to experience. That disconnect we have where folks expect to have everything that is seen on the TV has cut into the essentials that many should have but choose not to.

I agree that car insurance leaves a lot of holes and unnecessary risk by regular folks but these people will call up and argue for 30 minutes about a $7.50 charge within the policy. Folks rip the wealthy in here as having huge needs but I see an awful lot of folks time wasted with people who do not value their own time in terms of $$$ or your $$$, that's the type of peeps I want to try and steer clear of. Let Geico and Progressive fight over that person, I want the person who doesn't mind an extra $50-$100 every 6 months if it means great service and coverage to the point they almost welcome someone hitting them since they are so sure in their insurance. Fantasy perhaps but don't knock me off my cloud today, please.

 

[InsCommentary]

Rick, we all know that it's the middle class that needs higher limits of insurance and better coverage more than the affluent class. A few years ago, Hulk Hogan's son had an at-fault accident and there was a multi-million dollar lawsuit. It was revealed that the family, with an alleged net worth of $30M, didn't even have an umbrella policy. However, they had millions in assets and were able to pay the judgment.

Most middle class families don't have the assets or future earnings capabilities to weather this kind of storm. That's where insurance comes in. Just about every family needs an umbrella policy to protect assets and earnings now and for the next 20 years in the event of a judgment that attaches future income. Most families spend WAY more on pizza every year than what a good umbrella policy would cost them.

The other reason for higher limits and broader coverage of an umbrella is a moral one. We all have a moral and ethical obligation to account for the injury and damage we may negligently cause innocent people. Rich people have assets and income. The rest of us have insurance.

I have a blog and tomorrow I have a guest blogger who writes about how to sell coverage not price. He has told me story after story of prospects that come to him to see how much money he can save them and when they leave, they're paying more than they are now but with much better coverage that they understand why they're paying for. If i don't forget, i'll post a link to the post or you can check it out at www.InsuranceCommentary.com.

 

[BigSteve]

Same Car, Same Accident. EVERY Carrier is Feeling it!

2014 Acura and a 2016 Acura.
Cost of Claim 100% more than the 2014 Acura.

Frequency is up given, cheap gas and distracted drivers

Severity is through the roof because the same fender bender is now 100% more expensive than it was before because the bumper now has 10 sensors in it and a camera. and can park itself.

Industry is hurting. How does that play out in your agency?

It's been a long time but Shawn Michael Walker is Back Baby!

People still write car insurance?

 

[insurance1822]

I know plenty of PI lawyers & nobody is getting judgments attached to them unless they're wealthy & it's punitive. The lawyers want the quick judgement & if the carrier offers the full policy limit & they refuse & to go to court, they can face penalties if they lose. Not to mention it will take the lawyer a substantial time investment to bring a case through trial. The lawyer would NEVER waste their time unless the violator has SERIOUS assets & did something SERIOUSLY heinous like drunk as hell & killed a family or small child.

Sorry world - most people (99%) DO NOT need umbrella's. It's just reality.

Where people are really exposed is inadequate UM/UIM, water backup on home insurance, large hurricane deductibles, poor water backup endorsements like state farm's who's reads like a flood policy etc.

And those middle class people are usually the LEAST likely to notice small charges. They're middle class for a reason & that's because they're not the best fiscally (otherwise, they wouldn't be middle class.)

Folks, this brings the discussion back to bums. Engineers are the worst, followed by physicians. Personal lines is about building a book fast....w/ the least amount of service. I have shifted my operation & I'm shedding these people as fast as I could.

 

[shawnmwalker]

That cracks me up. How did we get to Physicians and Engineers and bums.


HAHAHAHAHAHA!

 

[InsCommentary]

That cracks me up. How did we get to Physicians and Engineers and bums.


HAHAHAHAHAHA!

I think they're called deplorables.

 

[Rick Deckard]

I know plenty of PI lawyers & nobody is getting judgments attached to them unless they're wealthy & it's punitive. The lawyers want the quick judgement & if the carrier offers the full policy limit & they refuse & to go to court, they can face penalties if they lose. Not to mention it will take the lawyer a substantial time investment to bring a case through trial. The lawyer would NEVER waste their time unless the violator has SERIOUS assets & did something SERIOUSLY heinous like drunk as hell & killed a family or small child.

Sorry world - most people (99%) DO NOT need umbrella's. It's just reality.

Where people are really exposed is inadequate UM/UIM, water backup on home insurance, large hurricane deductibles, poor water backup endorsements like state farm's who's reads like a flood policy etc.

And those middle class people are usually the LEAST likely to notice small charges. They're middle class for a reason & that's because they're not the best fiscally (otherwise, they wouldn't be middle class.)

Folks, this brings the discussion back to bums. Engineers are the worst, followed by physicians. Personal lines is about building a book fast....w/ the least amount of service. I have shifted my operation & I'm shedding these people as fast as I could.

1822,

-I read you loud on clear on Engineers, never my favorite in any field of sales I have ever been a part of. They take the fun right out of it.

-Physicians can be a real nightmare. I try to defend the affluent in here but I have a lot less respect for physicians then i do a lot of company CEOs. Just because they were able to go to school all the way until they turned 30-35 doesn't automatically make them a genius in everything. In fact I'm surprised some of them find their way home at night. They have very few folks keeping them in line or in check. I apologize to anyone those words offend but I have lived thru several family members where the doctor should have been more honest about the situation.

-What professions do you enjoy building a book of business from?

TY 1822, always love your posts and POV.

 

[InsCommentary]

1822,

-I read you loud on clear on Engineers, never my favorite in any field of sales I have ever been a part of. They take the fun right out of it.

TY 1822, always love your posts and POV.

I graduated from college with a degree in engineering. LOL.

----------

"Sorry world - most people (99%) DO NOT need umbrella's. It's just reality."

There is a moral point to be made for me. If I negligently injure someone and they're a quadriplegic for the rest of their lives, it's OK if I say "Nyah, nyah, nyah, nyah, nyah...I don't have enough in assets or income for any attorney you can find to come after me"? The less you have in assets and income, the MORE you need an umbrella (to the point of affordability) if you have any sense of personal responsibility for your actions.

"Personal lines is about building a book fast....w/ the least amount of service."

It's not about assisting American families in avoiding potentially catastrophic financial loss that could ruin them for years to come?

 

[Matt37]

Write statutory limits and you are good to go

That's what we did in FL when our book was struggling.. 10/20/10, no UM... I'll do that all day.

Anymore than that I am out.

I'll never forget.. One of my limo insured smacked one of those Bentley Spurs in Ft. Lauderdale.. I got this long winded letter from a hot shot attorney in Miami with a $55,000 repair bill! Really wasn't that much damage but with Bentley it doesn't take much... Bentley owner had Geico!

We cut him a check for $5k and sent him Geicos claim # .

 

[MVI]

I will do business with middle-class blue collar people all day.