Fast, Easy and Cheap: That's Not Enough

What’s more important, fast and convenient, or having a six-figure uninsured loss? And exactly what coverages are provided?

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“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”  ― John Ruskin
Recently, I read a blurb that featured an “experiment” by SafeButler, an online premium comparison web site. The purpose of the experiment was to see how fast someone could get a renter’s insurance policy. They tested 10 online sources for coverage on a “luxury apartment.” We might recall that Dr. Frankenstein did an experiment once. It was ill-advised and didn’t turn out well. In this case, we have an experiment that, if relied on by consumers, might not turn out well, though the results of this experiment were presented as if they were a good thing. According to the report: “Assurant, Jetty and Lemonade have done a fantastic job of condensing the number of questions. With Jetty and Lemonade, we can almost finish the entire flow in about one minute.” Keep in mind that they were quoting a “luxury apartment.” That would imply to me that the renters are fairly affluent. As such, should they be asked a “condensed” number of questions in order to identify their insurable exposures? Do they have an umbrella policy? Do they need an umbrella policy? Would each of these sources provide them with the basic coverages they need, especially any underlying coverages required by an umbrella policy? Do these “luxury apartment” dwellers have significant amounts of jewelry or other property that has limited coverage in these policies? Do they perhaps belong to a private club or participate in volunteer activities with liability exposures? Do they have a need for personal injury coverage? Do they do any work from home? Do they own a watercraft housed at a local marina? Do they own any other properties? See also: 4 Hot Spots for Innovation in Insurance   What are the odds that these and possibly other relevant questions were asked at these web sites in “about one minute”? According to a chart they provide, the top two fastest quoters, Jetty and Lemonade, asked two and five questions, respectively. What’s more important, fast and convenient, or having a six-figure uninsured loss? And exactly what coverages are provided by the fastest/cheapest quoters? The report says they compared coverages “at the same level.” If they didn’t compare coverages at the policy language level, they didn’t compare coverages at the same level.
“There is more to life than increasing its speed.”  ― Mahatma Gandhi
I wrote an article last year about my son’s experience in renting his first apartment. The property management company required renters insurance and they had a relationship with a vendor that could provide it. You could read the policy online. No endorsements. Limited named perils. Minimal additional coverages. $50,000 liability limit. Overpriced junk. For an extra $80, I could get him a good HO-4 from a decent company. For an extra $120, I could get him a premium policy. He went with that AND a personal umbrella policy. I told him if he was ever short in paying for this superior coverage, I’d pay it, but he was going to protect his assets and income stream AND, even more important, he was going to protect innocent members of the public from his possible negligence. The report’s conclusion was: “People on a tight schedule want to feel safe and get covered fast. While all companies we tested provided great coverage, some were faster than others.” “Feeling” safe and actually being safe are two different things. How does the experiment warrant that ALL of these companies provided great coverage without examining their products and options in detail? And how do we know if each of these quoted policies properly and adequately cover the unique exposures of the applicants who reside in a “luxury apartment”? Do they cover all of these real-life exposures? See also: Insurance Coverage Porn   Does anyone really care as long as they can complete the unpleasant insurance purchasing task in one minute? Probably not…until they have a serious uncovered claim. Then fast, easy and cheap doesn’t seem that important. As my mentor, the late John Eubank, CPCU, ARM, would always say:
“The bitterness of no coverage is remembered long after the sweetness of low price has been forgotten.”

Bill Wilson

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Bill Wilson

William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of Insurance Commentary.com. He retired in December 2016 from the Independent Insurance Agents & Brokers of America, where he served as associate vice president of education and research.

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