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Insurance Marketing: Getting Your Name out There

Written by Michele Wilmonen. Posted in Definitions Last Updated: 08/18/2011

Insurance marketing has migrated away from strictly selling through agents to marketing to the masses.

Insurance Banner to Advertise An Insurance Company

Insurance companies employ many marketing ploys to get you to remember them.

Marketing for any company is very important. If you are in a highly competitive field like insurance it is not only important, it is vital. There are so many insurance companies out there for people to choose from that if a company is not participating in insurance marketing, they will not survive.

For an insurance company to survive they have to constantly change the way they market themselves to get their name out there in front of you. Not only that, but they also have to get you to remember their name.

The Basic Premise

The base premise of insurance marketing now is to get your name out there into the public. If people don’t know who you are, they aren’t going to try and get a quote from you. No quotes mean no business.

Some insurance companies still rely heavily on independent insurance agents to sell their insurance as their only means of marketing. These are usually small insurance companies whose sales will remain small if they continue to do this.

The insurance companies that have made their way to the Fortune 500 list with their company size and revenue are the ones that are actively advertising their presence as an insurance company. They are engaged in effective advertising campaigns so that you will remember them. They are also putting their names on sports complexes, race cars and sponsoring high profile events to get their name out there.

Insurance Mascots

Mascots for teams and other companies have been around for a very long time. They are the symbol that sticks in the heads of people (anyone remember “Avoid the Noid” from Domino’s Pizza?) to get them to remember a company.

They also create a figure that people have an easier time psychologically supporting. Just ask yourself if you see the Walt Disney Company as a huge international corporation or the makers of Mickey Mouse?

We can rally behind the company with passion and smiles when we think of Mickey and all of the other characters. But, when you start to think that it is just a huge company with the goal of separating us from our money, the good feelings start to go away.

In the field of insurance the GEICO Gecko, Flo from Progressive and Mayhem from Allstate are the top three recognized mascots in the insurance industry right now. These are figures that help people remember the insurance companies they represent.

How many of you would have been able to remember GEICO without that gecko with the accent?

Agents

Insurance agents used to be the primary insurance marketing avenue that companies took. The agents were located in local markets and it was their job to sell, sell, sell.

Today, agents still sell insurance and are a good portion of insurance marketing, but they are no longer the only source. The internet made a huge change to the way that insurance is marketed as people can now go online, get a quote and purchase their policy right from their home.

Now companies are finding themselves having to step up their own advertising to get their name out there in front of the people that are getting their own insurance without an agent.

Underwriting: The Rules of Auto Insurance

Written by W. Lane Startin. Posted in Definitions, Research Last Updated: 08/18/2011

What underwriting is, why statistics drive it, how computerized underwriting streamlines the auto insurance buying process, and why underwriting fosters auto insurance competition.

Let computers do the underwriting. Life is less stressful. Really.

As with everything else, auto insurance has rules. One has to follow those rules in order to get the right policy issued to the right driver and the right vehicle to ensure both proper coverage and to keep the insurance company in the black at the same time.

But what are the rules?

This is a question that can confound even the sharpest of minds. Fortunately there is a method to know how the game is played: underwriting.

In a general sense, underwriting refers to the qualifying and pricing rules insurance goes by. Underwriters work in all forms of insurance: homeowners insurance, life insurance, renter’s insurance, commercial general liability insurance, you name it.

For auto insurance underwriting is dependent on literally thousands of variables regarding the auto, the driver and the conditions the auto is driven under, such as miles driven to work each day. All of these factors and more can not only determine if the auto and driver qualify for a policy to begin with, but also how much the premium will be.

Statistics Rule in Underwriting

Auto insurance underwriting is driven by statistics. The basic premise behind auto insurance pricing is that groups which cause the most accidents should pay the most in premium, while safer groups should pay less.

These experiences vary from company to company, but for the most part insurance companies agree that teenage drivers cost more than their older counterparts. Also,  Women are slightly less expensive to insure than men and people with tickets and claims cost more to insure than those with clean records. Insurance companies employ actuaries to crunch the numbers and back these claims up with hard facts.

Underwriting Goes Digital

Despite often complex variables, many auto insurance carriers are moving away from human underwriters and relying more and more on automated underwriting to allow for quicker policy issuance. In the past agents temporarily bound coverage when an application was written with final approval, or policy issuance, coming only when the policy was approved by an underwriter at the home office.

Today many auto insurance companies will issue a policy on the spot thanks to computerized underwriting systems, sending an application to an underwriter at home office only if a particularly unusual circumstance is encountered.

Computerized auto insurance underwriting takes the guesswork out of auto insurance applications, which saves both insurance agents and customers a lot of grief. Customers know that their policy is issued and in force before they walk out the agent’s office, and agents don’t have to go back days or even weeks later to tell a customer their policy was turned down by underwriting, something agents dread more than just about anything in the business. If there are problems, it’s known right away.

Different Companies Use Different Underwriting

Not all insurance companies are created equal, and some companies look at the business with very different mindsets. For example, a standard insurance company will underwrite very differently than a high-risk insurance company, and a specialty car insurance company will underwrite even more differently than their mainstream counterparts.

This is why price can vary widely for the same driver and the same car from company to company; different companies consider different things in their underwriting. Because underwriting is by no means uniform across the industry, it pays to shop around.

The Story of Property and Casualty

Written by W. Lane Startin. Posted in Definitions, Research Last Updated: 08/18/2011

What property and casualty insurance is, the history of property and casualty insurance in general and auto insurance in particular, and how it all ties in to save you money.

Benjamin Franklin. Your Founding Father ... of insurance!

Your local auto insurance agent is probably what’s referred to in the insurance industry as a “property and casualty,” “P&C,” or “multi-line” agent. What does that mean, anyway?

Well, it means that he or she sells and services more than just auto insurance. While there’s plenty to write about auto insurance (and believe us, we’ve proven it), it’s just the tip of the iceberg when it comes to the larger insurance realm.

Auto insurance is part of a larger group of insurance types, or “lines” as they’re known in the industry, known as property and casualty or P&C. Other forms of property and casualty insurance include homeowners, renters and most commercial and general liability insurances.

Most states require a special type of insurance license to sell and service property and casualty insurance. Because most large auto insurance carriers are multi-line companies, they require their agents to be property and casualty generalists as opposed to auto insurance specialists.

A Short History of Property and Casualty

Crude forms of property and casualty insurance can be traced all the way back to Hammurabi’s Code in ancient Babylonia. Actuary tables developed by Blaise Pascal were in use in Europe in the 1600s. Property and casualty insurance in America can be traced back to 1752 Philadelphia, when a group of property owners banded together to form the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. The prime mover in this organization? None other than Benjamin Franklin, who later had a hand in forming the first life insurance company in America as well.

In addition to forming the precursor to homeowners insurance and therefore the beginnings of property and casualty insurance in America, the Philadelphia Contributionship also pioneered underwriting techniques by refusing to insure houses that were considered unacceptable fire risks (and in 18th Century Philadelphia, there were a lot of those) as well as ushered in some of the country’s first zoning ordinances and building codes.

The History of Auto Insurance

Auto insurance, of course, came a bit later in our history with the advent of the automobile itself. The first recorded auto insurance policy was written by Travelers in 1897 for Dayton, Ohio, resident Gilbert J. Loomis. Loomis paid a cool $1,000 – a fortune in 1897 – for a policy that covered only property damage, bodily injury or accidental death. In other words, a liability only policy.

Auto insurance began to assume its modern form in the 1920s with the formation of companies like State Farm in Illinois and Farmers in California, both founded on the premise that farmers were safer drivers than the general population. Although harder statistical data is used today, the same basic concept that some groups are cheaper to insure than others remains a central tenet of auto insurance marketing and pricing.

How It’s Related

Underwriting in all property and casualty lines is driven by statistics. What’s more, auto insurance discounts are often available by purchasing other property and casualty products from the same company. These “package discounts” are often a great way to get cheaper car insurance. Ask your agent for more details.

Insurance is Not a Bad Word

Written by Todd Clay. Posted in Definitions Last Updated: 08/13/2017

Insurance offers us financial protection and stability in the event of an accident; it is not the unnecessary evil that some people make it out to be.

A Broken Nest Egg Without Insurance

Without insurance, you would have to use the money in your nest egg to pay for accidents.

If the word insurance had fewer letters it would be classified as one of those bad four-letter words by most. People hate insurance, they don’t want to buy it and most feel it is a legal scam. But, the idea of insurance is not the evil entity that it is made out to be.

It is bad-intentioned people that give insurance its bad reputation. Just like the saying “Guns don’t kill people, people kill people”.

Few people understand what insurance really is, how it protects them and also that it has a long rich history of our ancestors voluntarily creating it. All they see is that they are required to have it and it is another bill that they have to pay.

What is Insurance?

Insurance is defined in technical terms as the transfer of risk from one party (you) to another party (insurance company) in exchange for money.

Okay here is that definition in plain English: You are paying the insurance company to accept the responsibility of paying for any damages that may be caused to your vehicle or by your vehicle. Of course, what the insurance company pays for depends on the insurance coverage that you buy.

What Are the Benefits of Insurance?

Insurance protects people from financial destruction. This is the only reason to have insurance and is the only reason that it was created.

You purchase insurance on your vehicle so that the insurance company will pay for the large bills that result from an accident. Bills for things like car repairs and seeking medical treatment.

These bills can get to be so big that you most likely can’t afford to pay them. If you had to pay for these bills out of your own pocket, you would lose everything that you owned and be in debt for the rest of your life.

On the other side, insurance also financially protects the people that you do damage to. Because your insurance company pays to repair the other person’s vehicle and their medical bills, they don’t have to try and come up with the money themselves or wait for you to pay it.

Without insurance protection you are putting not only yourself at risk of financial ruin, you are also risking the financial stability of others.

Where did Insurance Come From?

Insurance was first created to protect companies in the shipping business. Merchants got together and put up money to protect cargo while it was in transit to where it was to be sold. The first record we have of this is from China.

Insurance today is still used in the same way by businesses, but has become a business field of its own. Like any other field, companies expand and look for new products to sell to the public. This is why we now have so many different types of insurance available to us.

Finding Covered Perils in the Fine Print

Written by Michele Wilmonen. Posted in Definitions Last Updated: 08/15/2011

Covered perils (not covered pearls) are what you hope your car accident falls under when you file a claim.

 
Covered Pearls and Covered Perils are Two Very Different Topics

Covered pearls make you pretty; covered perils help you when life isn't pretty.

Covered Perils. Sounds a little like a band name or even a type of jewelry.

If you don’t work in the insurance field, you most likely would be guessing things just like that if you were ever asked what the words “covered perils” meant. Covered perils are actually a much more serious topic than any band name or jewelry. If you are filing a claim with your insurance company it is something that you are hoping that your claim will be qualified as.

What Are Insurance Perils?

To understand the word “covered perils”, it is first important to understand what the word “perils” mean. Per the Merriam-Webster dictionary the definition of perils are “1. Serious and immediate danger” and “2. The dangers or difficulties that arise from a particular situation or activity”.

Your insurance policy is not going to be much help if you are in “serious and immediate danger” so definition number two is what applies in this case.

Perils in the world of insurance are situations or activities that cause difficulties in your life. For example, having your vehicle hit by another car, your car catching on fire or you running into a telephone pole are all perils. All of these situations are going to make your life difficult.

What is A Covered Peril

Now that we know what a peril is, let’s talk about a covered peril. Covered perils are the situations that are going to cause difficulty in your life that are covered by your insurance policy.

These covered perils are listed in the large legal documentation that you first received with your insurance policy. The legal documentation is different from company to company, but the general list of what situations your insurance will cover varies little between companies.

Insurance companies don’t send the legal documentation out at each renewal like they do with the declarations page. This is why it is important to keep the document when you first get it.

If you no longer have the legal documentation, contact your insurance company or your agent to get a copy.

What is Not a Covered Peril

Perils that are not covered by your insurance are the situations where the insurance company will deny your claim if your damages were caused by certain situations. Usually these situations are illegal acts or situations that happen frequently in your area.  The insurance company can decide not to offer coverage for certain situations to protect themselves financially.

A situation such as intentional damage done to your vehicle for financial gain is not a covered peril. Also a situation where you have intentionally damaged another person’s property with your vehicle is also not a covered peril.

A full list of perils that are not covered can be found in the legal documentation for your insurance policy. Having this list around in the case of a claim is very important to protect yourself if the claims adjuster denies your claim for not being a covered peril.

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