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My daughter, Angela, has officially left home. She had started a new job out of state a few months ago, and it was time to buy a car. After doing a great deal of research, she found the car she wanted and was ready to drive it off the lot. But, first it was time to buy auto insurance.

Since she was buying the vehicle close to our home, and she needed the coverage RIGHT NOW (I could not provide it, because I’m not licensed in the state where she lives), she decided to call GEICO.

I sat next to her as she made the call. It was like a trip through the looking glass.

Angela had already completed an online quote, so the representative could see the information on his screen. As the two of them were going over the coverage (which I could hear) the representative told my daughter the coverage included $50,000 of property damage liability. Property damage is the coverage which pays for damage to others' property you cause in an auto accident. The limit chosen is the maximum amount a company will provide in the event of a loss.

Now, $50,000 doesn’t go very far. It’s fine if you damage the fender of a typical four door sedan. But what if you total someone’s brand new Lexus, or similar luxury car? What, if in the process, you hit another car…mail box…or fence? $50,000 is adding up real quick.

I advised Angela to ask the GEICO rep to give her a price for $100,000 of property damage; which she did. There was a pause. He explained that he could not authorize that much without an “okay” from his supervisor.

What?…Are you kidding?

$100,000 of Property Damage is the standard limit we offer at Regency Insurance. When clients see how little the cost to increase the coverage (about $1 per month), they almost always take it.
However, The GEICO rep thought otherwise. He told my daughter that this limit is rarely asked for and it is usually reserved for doctors and lawyers (he actually said that).

I was speechless (which is very rare for me). I couldn’t imagine a licensed agent refusing a client’s request for higher limits of coverage, let alone, arguing it wasn’t needed.

After a brief hold, he came back on the line and said it was approved. The cost…like I said…about $1 per month.

I thought about what happened, and wondered how I would react if I heard someone at my office give this same advice. It doesn’t matter because no one here would ever do that.

But maybe I was overreacting. Maybe, other agents do the same thing. I called a colleague of mine. Someone I respect very much, and told him the story. Amazingly...he was speechless (again a very rare occurrence in insurance agents). He agreed. Nothing like that would ever be said in his agency.

It got me to thinking; is price now so important that insurance companies are arguing against better protecting their clients? Do clients understand what they are buying? Shouldn’t insurance agents feel obligated to inform and educate their clients? I think so. Maybe fewer policies are sold because a little more time is spent with each client. And, maybe your client chooses the “cheaper” coverage anyway, but at least they now know the difference. I have no doubt Angela would have accepted the lower limits if I wasn’t in the room at the time.

As she got off the phone, I wondered how much money GEICO saves by capping Property Damage limits at $50,000, and was it really worth it. I thought about all those poor souls who discovered this limit wasn’t enough for the accident they caused and the panic experienced as they realized the difference was their responsibility. How will they pay for it?

This little episode reminded me of the importance of an independent agent. Fifteen minutes might save you a few dollars in premium, but apparently, it could cost you thousands when a claim occurs.

The term “Buyer Beware” applies now more than ever.

Regis Coustillac, CIC

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