When Should You Get an Insured’s Signature?
So this question came up this week in the Agent Network Alliance Office today. At what point do you need to collect a signature from a client?
I’ve been in hundreds of agencies over 15 years and I can say, this really does vary across the board. You’ve got a few different kind of agents and this is what we’ll talk about today.
You might be wondering which one are you. Let us know in the comments below!
Hopefully, this isn’t you but I’ve met some of these agents before where they’re not having clients sign anything. These folks don’t last too long in the industry as they’re going to pretty much lose any carrier representation within their first carrier audit. Signed apps? “Nowhere to be found.” Signed cancellation form? “Never seen one.” Request to reduce liability limits from 100/300 to state minimum? “Why waste the clients time!”
This agent also hasn’t ever found themselves on the other side of an E&O lawsuit either. In such a suit, what is going to happen in front of a jury of your peers, is they’re going to enter into evidence every piece of paper that can be discovered in that insurance policy’s lifespan. What was requested, what was bought, what was agreed upon with signature, how payment was made, how changes were requested, modified, and confirmed to the insured, and finally, how the policy was canceled. This agent’s entire office process and procedures are going to be discussed ad nausea to see if this is how every transactions is completed. If you don’t have any documentation which would back-up why you did something at the client’s request, well, spoiler alert, this isn’t going to end well for you.
This agent is a boat load of fun. They weren’t invited to a lot of parties because they spent some time as an officer in the Russian Military. All joking aside, these folks operate more like a lawyer or an accountant and ended up falling into the insurance industry because, well, they liked paperwork. No one wants to buy from this agent, their own mother has their policy somewhere else.
The militant signature agent has their insured sign everything, with wet ink, in person, with a witness, in triplicate… at the courthouse. I’m not too far off here. This agent wants no gray areas to present themselves during the life of this policy and will quickly respond to every insured’s request with a statement like, “you signed on page 3 that you declined that additional endorsement. Why did you sign that if you wanted it?” This poor agent is still probably reviewing their first carrier contract with their attorney.
Another sign of this agent is that they’re so bogged down with paperwork that they don’t get a chance to work on new business or to get proactive on their renewals. Customer satisfaction is low. Customer retention is non-existent. Don’t be this agent either.
Here we are… the “just right” agent. This is the agent you want to be. This agent balances their time between compliance and having time to do what you like to do, sell business and take care of your accounts. This is who we are at CoVerica and who we recommend every one of our agency alliance agents aspire to be in our Dallas Agents Alliance.
This agent has weighed the pros and cons of getting signatures on everything and has figured out that what you really want, are signatures on negative impacts to the policy. The client wants to cut coverage, signature needed. A client wants to get a lower deductible and agrees to pay the premium increase, no signature needed. The client wants to increase their dwelling value because they want a higher replacement cost, no signature needed. A client asks to raise their homeowner’s wind/hail deductible in Dallas, Tx to 5% because ‘the chances of my home getting hit by baseball sized hail are remote…’ we’re getting that signature, triplicate… then call their spouse to make sure they’re taking their meds.
At the end of the day, you need to strategically make the choice on what’s important to get a signature on and what isn’t important to get a signature on. If you talk to an insurance carrier, they want you to have a signature on everything (contractually, there may be things that are non-negotiable and require a signature). If you talk to your clients, they say, “just make this easy on me, can’t we just shake on it?” Balance is struck in the middle and your agency needs to make this decision on their own. At the CoVerica Agency Alliance, our members are required to get a signature on any negative bearing change on a policy and so far, this has served us well since 2002.