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

Posted byDenny Hatch

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

May 12, 2005. A75-foot stone retaining wall built in 1908 collapsed onto Riverside Drive inthe Bronx burying everything in sight.

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

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

Local television and newspaper coverage wasvast and filled with outrage at neglected infrastructure. The wall had beenbuckling for months and repairs were scheduled to commence the followingMonday.

"DeniseJack and other car owners thought they had it bad when a 75-foot retaining wallin Washington Heights in northern Manhattan collapsed on May 12, burying theirparked vehicles beneath untold tons of debris. But their ordeal was actuallyjust beginning. Their cars remain buried there today, and none are expected tobe 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 insurancelimbo."  —Anahad O'Connor and Rachel Metz, NewYork Times, one month later (June 11, 2005)

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

Worse news, the car owners were forced tocontinue paying their insurance premiums that were buried under tons of debrisand never again drivable.

•New Jersey medical student Steve Wang, who used his Ford Taurus to commute toNew 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 Manhattanon two buses and a train.

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

Insurance Industry Definitions: TheDifference
Between an Accountant, Actuary and Adjuster

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

• An actuary is someone who doesnot have the personality to be an accountant.

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

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

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

A long-time colleagueof mine was the late Bob Doscher who came up with the term: "CatalogBandit."

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

Whereupon next morning she returns all three dresses for fullcredit.

Do You Trust Your Customers?

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

Further, if a payingclient 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 finesand jail time.

In short, it's commonsense to give your customers the benefit of the doubt unless you have aniron-clad reason not to.

I stumbled into directmarketing in 1962. I went to work as a cub copywriter for GrolierEnterprises, publisher of the Dr. Seuss children's book club. In a routinesales meeting, the president of the company, Elsworth Howell casually dropped a7-word business rule that became etched into my DNA:

"Always convert a disadvantage intoan advantage."

AnOld-time Marketer's Obvious Solution

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

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

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

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

5. Look on this disaster of the buriedcars as a marketing bonanza — the basis of a nation-widePR/publicity/advertising campaign that will set you apart from your deadbeatcompetitors who screwed their clients.

6. If I were in charge of corporate PR, Iwould relish the opportunity to honcho this campaign that touts my wonderfulcompany 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 onTV.

• Most car insurance ads are designed for1) instant name recognition by consumers, (2) lowest price and (3) cutesy-poo buffooneryfor name recognition by robotic web crawlers to guarantee the company name high placementon the Google/Bing lists when auto buyers come looking.

• I have owned automobiles all my adultlife and been required by law to carry full insurance as a pre-requisite to carregistration.

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

• This 2005 Bronx avalanche showed thetypical car insurance companies assume all their customers are rip-off artists anddeserve to be screwed.

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

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

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