25 Jan Does Your Agency Provide “Casual Quotes”?
What do I mean by casual quotes? These are quotes provided to walk-in accounts or “prospects” that call the agency, or possibly current agency customers, who are essentially just looking for a number for a specific type of coverage. The exposure could be personal or commercial. Their goal could be to secure a lower price or get an idea of what a specific coverage may cost. Unfortunately for many, insurance is all the same, and the only difference is the price. So these are often the price shoppers that “just want a number” to compare with what they are currently paying.
While many agencies have chosen not to allow this type of customer contact, partly due to its problems, other agencies may feel a need to entertain these types of prospects as part of their marketing efforts to achieve growth. For agencies that provide “casual quotes,” there are some issues that have the potential to generate their share of E&O claims.
If the agency allows these types of prospects, it should follow certain procedures and expectations with those procedures documented. Certainly, one of the more significant issues involves the quality or the depth of the information. In most cases, the lack of depth causes me concern. Obviously, without the necessary breadth of information, there is a greater possibility that the premium indication is not accurate.
Agencies should secure the necessary information based on the coverage being requested. If it is a struggle to secure this information, or if there are some real concerns about the quality of the information, it might be appropriate for the agency to “let this one go to one of your competitors.”
It is best not just to give a number. Where possible, some written communication should be provided that details the coverage quoted and that:
1. No coverage is bound.
2. The “premium” is based on the information provided and may change as more information is developed.
3. Notification is made of what additional information is necessary, including the completion and signature of the appropriate application and at least a deposit premium.
Have there been E&O claims where a customer calls for a quotation on coverage such as workers’ compensation? Yes, and the customer took the position that they told the agency staff member they needed the coverage and to put it in effect. That was not the agency’s side of the story.
Bottom line, you never know what your customer will say after they have suffered a loss only to find out that they did not have the coverage they thought they had. The better the level of documentation, the better the chance of the agency prevailing in the event of a problem.