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Aug 28
Insurance is a Commodity ... Until You Need To Use It

call-center-4012099_1280.pngPatrick Wraight is out with an important point about the downside of "fast, cheap, and easy insurance purchasing." He describes the case of a driver injured by another at-fault driver and who was let down by both her own carrier and that of the other driver.

This is the unintended consequence of self-service, fast, cheap, and easy insurance buying. When people are buying insurance, no one thinks to themselves that they are going to have issues if there is a claim. In fact, most people think that they’ll never have a claim so that never enters into their thought process. They are simply looking for insurance that they can afford. They don’t consider what may go into the fast and cheap parts. GEICO and Progressive achieve fast and cheap by taking that local agent out of the loop. I know that they have local agents, but that’s not where the lion’s share of their business come from.

That means that in every interaction, the customer has to get online, or call into a call center, to reach someone who doesn’t know them, doesn’t care about them, and doesn’t have any reason to extend themselves for them. The customer is just another voice on the other end of their phone. Whether the customer wants insurance now, or they want their claim paid now, they’re just another voice in the representative’s ear. Either way, when the call is disconnected, the representative will note the file, move it to the proper queue, and take the next call.

In the end, the person who suffered damage (both bodily injury and property damage) is still not made whole. They aren’t indemnified. They are waiting on the promise of the insurance company that told them they could save 15% in 15 minutes and on the insurance company that told someone else to name their own price.

This is what you get when you go after fast, cheap, and easy.

Those TV commercials that make us laugh don't seem so funny when something like this happens. There's more to insurance than price and entertainment. This is a message we all need to hammer home over and over to consumers, whether they want to hear it or not. The only way the message will get through is if it we repeat it until we turn blue: Cheap, fast insurance that doesn't protect is too expensive.

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