This week, we got the donuts, pens, and mouse pads from our friendly neighborhood bank. On a larger scale, insurance companies are very intertwined with banking – either they offer it or they partner.
Shortly afterward, I had a call from a client who had missed his renewal payment. During the reinstatement process, he indicated that he usually walks in cash to his local agency. Time is of the essence, so I tell him, if he does not pay the premium, the policy will need to be rewritten and he may lose some discounts.
A show of no faith
I ask for the credit card or may his bank account information to do an EFT. No, he says, I don’t have a checking, savings, or any type of account with any bank. Imagine my shock. As you wipe the image of a large mattress out of your heads, let me say, who can blame the guy? From what I have read close to nine million people have their identity stolen yearly. Plus according to the crime bureau, the total annual fraud cost was $20.6 billion in 2012.
Over the past two years, the banks have issued out credit cards with chip technology (which retailers have answered with machines that generally does not accept a chip or is broken). Considering also that insureds will give up a ton of personal information just to get better and more individual service, that number should not surprise any of us.
What about the insurance policy?
You may ask yourself, why be worried about what the bank offers when homeowner’s and renter’s policies can cover the insured substantially? After all, the HO0455 can offer coverage for costs associated with identity theft like reasonable attorney feels and time off work to sort things out.
At this point, you have probably been confronted with an insured who has already had their identity stolen. An insured may have had fraudulent charges show up on their credit card; had false accounts, loans, credit cards opened in their name; had their identity used by a criminal or terrorist either getting arrested or in the purchase of illegal gains.
It’s really heart breaking to listen to story of how they maneuvered the road to recovery. Even worse, who was the hero of the story? What kind of road blocks did they run into to fix things again? What about the small amount of insurers who base rates on credit scores? The rate may escalate after such an incident. Then what?
The thing on the insured’s minds – what are you going to do for me when something happens? In the mind of the insured, they link us to the bank. Just like that relationship with the insurance agent, if I log into my banks website or call them on the phone, I want to know how they’re going to help me get my life back if identity theft happens to me.
In comparison, when I log into my bank, they offer a phone number, a promise of an ‘internal claims group’ assistance, and an amount they would reimburse me if I suffered a loss. To me, that meets 90% my expectation. In fact, the majority of the major credit cards have the same approach.
What should the insured expect?
When I am in the bank, I often take their identity theft brochures and place them in the homeowner’s packets I give out when I sell a policy. In this instance, I would rather have an insured be over protected than have the minimal protection available.
It’s nice to have that reliable business bank for your agency. I tried to refer my overdue client there (a referral he declined). I believe we’re going to continue to run into more and more insured’s who have had the identity theft problem or are concerned about it. Be familiar with your policy, but also have an idea of who provides the best banking for their buck.