#165 Auto Insurers (2)

 http://dennyhatch.blogspot.com/2022/08/165-auto-insurers-2.html

#165 Auto Insurers (2) — Tuesday, 23 August 2022

 

Posted by Denny Hatch

 

 

Can You Trust Your Auto Insurance?
Uh-uh. A Lesson for Direct Marketers.

May 12, 2005. A 75-foot stone retaining wall built in 1908 collapsed onto Riverside Drive in the Bronx burying everything in sight.

 

The crash happened at 4:00 p.m. Immediately emergency crews rushed to the scene and worked through the night with heat-seeking probes and rescue dogs.

 

“There are no reports of anyone missing," said a reassuring Mayor Mike Bloomberg at the scene, "and the dogs don’t seem to think anyone is under the rubble."

 

Local television and newspaper coverage was vast and filled with outrage at neglected infrastructure. The wall had been buckling for months and repairs were scheduled to commence the following Monday.

 

"A Wall Fell on Their Cars. Then Bad Luck Set In."

"Denise Jack and other car owners thought they had it bad when a 75-foot retaining wall in Washington Heights in northern Manhattan collapsed on May 12, burying their parked vehicles beneath untold tons of debris. But their ordeal was actually just beginning. Their cars remain buried there today, and none are expected to be unearthed until the rest of the wall is stabilized and the rubble removed — up to a year from now. Until then, they are caught in the world of insurance limbo."  —Anahad O'Connor and Rachel Metz, New York Times, one month later (June 11, 2005)

  

The car owners immediately contacted their insurance companies and were blown off by the corporate adjusters. Since they had no way of proving their cars had vanished, the insurers were off the hook and not required to pay anything. 

 

Worse news, the car owners were forced to continue paying their insurance premiums that were buried under tons of debris and never again drivable.

• New Jersey medical student Steve Wang, who used his Ford Taurus to commute to New York, had no choice but to move to Manhattan.

• Nursing Assistant Denise Jack, who lived in Queens with her two young children, was forced to spend five hours a day commuting to and from her job in Manhattan on two buses and a train.

• Anthony and Joan Donovan, whose Nissan Altima disappeared in the detritus, were given car rental payments by Geico. That largess soon ended. Their car remained buried for months.

Insurance Industry Definitions: The Difference
Between an Accountant, Actuary and Adjuster

• An accountant is the person who goes onto the field of conflict after the battle and bayonets the bodies.

• An actuary is someone who does not have the personality to be an accountant.

• The only job in this world that is worse than being an actuary is that of an insurance adjuster. Imagine spending your entire life facing financially hurt, scared people and explaining to them why the insurance company does not have to pay a claim in full — or at all — because the small print says so.

Most astonishing was this quote by St. John's University law professor, Michael Sabino:

"These people have a bit of an uphill battle. If an insurance company tells them they have to wait it out for a year to see that the cars are excavated, and to see their vehicle identification numbers, then technically speaking they have a decent argument."

"An uphill battle?" "Wait it out for a year?" "Decent argument?" BS!!! Thus spake a sphincter-tight law professor whose business philosophy was above all, CYA. Professor Sabino proves the old saw that "People who can... do. People who can't... teach."

 

A long-time colleague of mine was the late Bob Doscher who came up with the term: "Catalog Bandit."

 

An example of catalog banditry was Doscher's saga of the woman who is invited to a fancy gala. She shops an upmarket fashion catalog and orders three expensive dresses for delivery the week before the party. After trying on the gowns, she selects one and wears it to the affair.

 

Whereupon next morning she returns all three dresses for full credit.

 

Do You Trust Your Customers?

First off, a client who has faithfully been paying you several thousand dollars a year for car insurance is not likely to be a bandit/rip-off artist.

 

Further, if a paying client were to falsely claim his car was buried under a hundred tons of rubble, the crime of insurance fraud would kick in and be punishable by serious fines and jail time.

 

In short, it's common sense to give your customers the benefit of the doubt unless you have an iron-clad reason not to.

 

I stumbled into direct marketing in 1962. I went to work as a cub copywriter for Grolier Enterprises, publisher of the Dr. Seuss children's book club. In a routine sales meeting, the president of the company, Elsworth Howell casually dropped a 7-word business rule that became etched into my DNA:

 

"Always convert a disadvantage into an advantage."

 

An Old-time Marketer's Obvious Solution

1. Pay off the claim immediately. Keep a happy customer.

 

2. It's a few thousand dollars — a teensy weensy fraction of your media advertising spend.

 

3. You'll have a satisfied customer who'll continue to pay you thousands of dollars a year.

 

4. That customer will be dining out on this story for years, resulting in new business referrals for you.

 

5. Look on this disaster of the buried cars as a marketing bonanza — the basis of a nation-wide PR/publicity/advertising campaign that will set you apart from your deadbeat competitors who screwed their clients.

 

6. If I were in charge of corporate PR, I would relish the opportunity to honcho this campaign that touts my wonderful company and dumps on all my competitors without having to mention them by name.

 

Takeaways to Consider

• What triggered this blog post was my column last year about sheer silliness of auto insurance ads on TV.

• Most car insurance ads are designed for (1) instant name recognition by consumers, (2) lowest price and (3) cutesy-poo buffoonery for name recognition by robotic web crawlers to guarantee the company name high placement on the Google/Bing lists when auto buyers come looking.

 

• I have owned automobiles all my adult life and been required by law to carry full insurance as a pre-requisite to car registration.

 

• All my life when paying for insurance I have worried less about price and more about the back end: imagining the horror scene of a crash or hurting someone when I was behind the wheel of a car. Would my car insurance keep me whole whatever happens?

 

• This 2005 Bronx avalanche showed the typical car insurance companies assume all their customers are rip-off artists and deserve to be screwed.

 

• What's more, we customers are too stupid to think through the penalties for potential insurance fraud.

 

• "The large type giveth and the small type taketh away." —Tom Waits

 

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