If today’s general public were to receive a letter grade on their understanding of insurance products, it would be a D, at best. Credit given for understanding that insurance exists. But in life, as in the classroom, when students are failing the teachers are responsible as well.
So, who is teaching the public about insurance?
For the most part, today’s insurance industry offers no real knowledge of basic insurance principles. The process of obtaining insurance has become all about the cheapest product, for the consumers and most insurance companies.
Customers are rarely advised of the importance of quality coverage and the marketing message is “cheap insurance is good insurance.”
Insurance companies spend billions on advertising that is practically designed to keep the American consumer from asking any real questions about their coverage.
TV commercials, online ads, sponsorships, anything it takes to sell a policy. Mentioning that insurance products are designed to protect people from financial and legal devastation is often not discussed.
The majority of customers have seemingly accepted the “cheap is good” message. Which in turn has allowed leading insurance companies to build businesses as nothing more than modern day assembly lines. With the focus on price, companies can forego the burden of customer education and are not bothered by a professional responsibility to their clients.
By offering insurance based primarily on cost, major insurance carriers can cut corners and remove valuable coverage. In doing so, they often leave the client feeling great as if they have obtained a “good deal.”
Unfortunately, that feeling is more often than not replaced with anger and fear when the benefits of an insurance policy are needed, but not present.
Quoting online is quick yet has the potential to leave the customer under covered. Today’s general public does understand even the most basic insurance principals.
So to have these same people who build a policy is simply reckless. As most online shoppers tend to adjust coverage numbers until an acceptable price appears, dangerously low or non-existent coverage options are often selected.
What’s more, once the client selects their own coverage, companies have no obligation to make any other recommendations. By shopping and buying online, the consumer is accepting responsibility for the policy they have selected. A great deal for the offering company but bad for the customer. Getting a second opinion from a licensed professional never hurt anyone.
Calling in to a company to obtain a policy has become as equally absurd. Clients are routed to huge call centers to speak with reps that are instructed, trained, and paid by the company represented. It is not hard to see a conflict of interest.
Reps have no ability to be openly objective or to disclose potential issues with a policy or company without repercussions.
These reps have strict performance goals, scripted responses, and practically no authority to make decisions. Once the policy has been purchased or the call ended, the likelihood of speaking to the same person again is slim to nonexistent.
In that scenario accountability ceases to exist.
This is where we find the industry today. Consumers taught to treat insurance purchasing as a bartering system, and countless insurance companies looking to cash in.
It’s almost baffling that something as important as insurance, is given such little respect. It has to be thought about it differently.
What do people do? What do they say? Make sure everyone is okay. But then what? Often, bring up insurance as the solution to the problem. So if insurance is available to alleviate devastation, shouldn’t it be handled more professionally from the start? If you have the chance to speak with anyone who has had to experience any of these scenarios, they will undoubtedly say YES.
With today’s model, many customers are not finding a helping hand when they turn to their policies for assistance. And it’s because their carrier lets them down. Telling us that all companies are created equally and finding the cheapest policy is what matters most, is simply not true.
Learning about insurance and how it works is the best way to effectively protect what matters most. Professionals at The Insurance Loft are independent and provide unbiased advice.
The ability to work with experts who can construct and manage your insurance strategy is a very real possibility and an easy conversation to have.
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