Is lack of customer accountability an issue in your agency? Do you have agency staff asking the question – “why do customers always make us feel like it is our fault when they have a loss that is not covered? They knew that they didn’t have that coverage”. This seems to be one of the bigger frustrations among insurance agencies.
An agency will be hard pressed to hold their customers accountable without a file that is well documented. However, documentation by itself will not get it done. It is important to realize that when an E&O claim happens, the E&O carrier will look to secure the actual file in question (paper or electronic) to see what it looks like and what is included. Solid documentation will make the E&O carrier’s job much easier.
Probably a day does not go by where there is some degree of client interaction. Customers are asking questions, modifying coverages, etc. Obviously these questions (and the answers provided) should be documented in the agency management system. In addition, requests to delete or decline coverage or to modify coverage in some manner should be documented as well. But documentation in the system is not enough!
Without some form of documentation that confirms or memorializes the discussion, mistakes can occur. Let’s take the scenario that the customer declined the personal umbrella proposal that you recently provided them. One solution is to request the customer send a note to reflect this; another solution is to send the customer a note! Something to the effect of the following:
“per our conversation of (date), you are declining the personal umbrella proposal we recently provided. If I misunderstood you or this is contrary to your understanding, please contact the agency immediately”.
The goal here is to attempt to address any potential misunderstandings between what the customer told you or thought that they told you and what you heard.
Has your agency ever had the scenario involving a commercial customer where the customer orders the package, the auto and the workers compensation but states “let me think about the umbrella and I will get back to you”. These conversations need to be very clearly documented not only in the agency system but with some form of written documentation between the agency and customer reflecting the customer’s decision. A document stating “at this time, per your request, the umbrella coverage has not been placed” really does not take that much time to produce yet it can have such a profound impact on an E&O claim if one develops.
How about the scenario involving the completion of an app? Since the best type of documentation involves something with the insured’s signature on it, holding customers accountable is enhanced when an agency can get the customer’s signature on a document. This is why getting customers to sign applications is so important. In virtually all legal jurisdictions, a customer is going to be held responsible for the accuracy of the information in an application if they signed it. A solid best practice is to require that the customer review the application and if everything looks in order, to sign it.
Enhancing the agency proposals can be a great way to hold customers accountable. Three great approaches include:
- Offer a variety of options. Don’t just offer a proposal for a $1mil umbrella; offer multiple options – make them choose the limit they want.
- Include definitions of key insurance terms.
- Include specimen policies / endorsements. This allows your customers to read the actual forms that will be part of their insurance coverage.
Enhance your E&O culture by making your customers more accountable.