ENCOURAGING CLIENT HONESTY
Some people think it's acceptable to be slightly dishonest when they buy insurance. They may fib a little to reduce Auto insurance premiums or try to 'get a little ahead' by exaggerating a claim. Unfortunately, inaccurate underwriting information and excessive claim damages hurt everyone by (at the very least) forcing premiums to rise.
A nationwide survey of 1,987 households conducted by the Roper Organization for the Industry Research Council (IRC) last year found that as many as one in three American adults condone lying to keep auto insurance rates down. Here are some other findings:
- 32% of respondents found it 'almost always' or 'usually' acceptable to understate annual mileage.
- 23% saw nothing wrong either with padding claims after an auto accident to make up for the deductible or with giving a phony address to receive a lower premium.
- 20% condoned both padding claims to get back premiums they had paid and listing a minor driver as an adult.
- 14% said they would exaggerate the value of a stolen car or withhold information about prior accidents, traffic tickets, or claims.
- 11% agreed that it's OK to incur unneeded medical treatment or stay away from work longer than needed to boost the value of an insurance settlement.
- 9% found it acceptable to lie about the way an accident actually occurred.
Only about half of the respondents said they would be 'very willing' to provide proof of ownership by showing the title to their car when buying insurance, to take the vehicle to an insurance office for a photo and inspection, or to have an independent medical exam after filing an injury claim.
What can you do?
Be honest yourself. Actuaries use facts and figures to calculate appropriate rates for given risks. It's tempting to understate your daily or annual mileage in an effort to keep Auto premiums low, but tell the truth; a clean conscience will make you more convincing when you persuade your client to do the same.
Know your geographic area. 'Go the distance' in an effort to help calculate the mileage from one area or neighborhood to another.
Know the owners and estimators of local repair shops. When a new repair facility opens, alert your adjuster to make an appointment with the new shop for a get-to-know-you visit.
Photocopy prospective clients' drivers' licenses to validate addresses and number of driving violations. Home addresses and driving records can be verified easily with the Department of Motor Vehicles when you have accurate information taken directly from a driver's license. Ask to make copies of both sides of the license for each member of a household or of each company employee being insured. Then order motor vehicle reports (MVRs) on each one.
Get to know clients personally. Facts about unfamiliar people are more easily distorted. Build a trusting relationship with them; the more comfortable they are talking with you, the more likely they will be to give you all the information your agency needs to protect them properly.
Visit the injured at home. When a client (or the employee of a client) has been injured in a covered claim, be sincerely interested in his or her health and well-being. While demonstrating concern, you can see for yourself how he or she is healing.
Obtain copies of official reports made to local authorities when the insured gives multiple or inconsistent versions of events surrounding an accident or loss. It's important to have as many facts as possible to calculate a fair settlement. There is a nominal charge for obtaining copies; you can ask the insurance company to reimburse the cost. It may save money in the long run.
Finally, to keep clients and prospects honest while trying to keep their premiums affordable, educate them about how insurance works. They should thoroughly understand the foundations of insurance: that its intent is to assist insureds in the event of a financial hardship. No client should ever be allowed to believe that insurance is intended to work as a maintenance agreement.