A Pound of Flesh and Fraud

I got a call from a local business owner that was looking for some Massachusetts Auto Insurance quotes. He asked me to stop by his store to review his current policy.www.jmdins.com  We save you money by coming to you.

When I arrived he had both his auto and home policies ready. He knew that there is money to be saved by combining them.

We went through all 12 parts of his policy.  The coverage was better than average $100,000 per person $300,000 per accident on part 5 Optional Bodily Injury.

I noticed that he was the only listed operator, no problem.

I asked him several questions about his situation. We discussed assets and his future plans for his family...

No sooner do I mention the family when his wife pulls in driving the 2007 Acura. She has the baby and all is well.

"I thought you said you were the only driver"? I say to him. "Well this is my wife...she moved here recently from Vietnam" he replies. "

That's fine but I don't see her listed anywhere on your policy. Let me get her date of birth and drivers license number and I will revise my quotes.  Which I did. 

A day or two later I went back with my figures.  She is a brand new driver here in Massachusetts. If we can provide verification that she has prior driving experience in Vietnam then we can adjust the quotes.  My numbers were more than $2000 higher than his current premium (obviously).

"No, No, No...this premium is too much...My wife, she only drives once in a while...Can we do it without her? My current agent did it that way"!!!

I explained "what ever your current agent did is going to be their problem when it happens". Every company asks that all household members be listed" If she has an accident the company will deny the claim.

I told him, No, I can't write the policy without listing her.  Your first phone call will be to me saying my wife just had an accident.  At that point the company promptly denies to pay the claim because they didn't get their "pound of flesh". They didn't get any premium dollars for her lack of experience. It's fraud in their eyes. I closed my file and left.

Maybe three of four months later my cell phone rings. It's the store owner.  His wife had been in an accident! He's explaining how it happened. She had missed a stop sign and crashed into another vehicle. "What's going to happen now" he says. I told him to call his current agent and see what he says.  I never heard back from him.

In the end, this person got ZERO, $0, nada, zip!  As I told him it's misrepresentation, fraud, what ever you want to call it. Insurance companies play hard ball at claim time. They aren't going to pay anything unless they've received their due compensation. 

We hear stories like this all the time. A customer wants to save money. We want to save that customer money too. But we won't reduce our standards just to write the business. In the long run it doesnt pay. It's doesn't pay for us. It doesn't pay for the customer.

You don't be "penny wise and pound foolish" now... That's another lesson for another day.

Thank you!!