How to Talk About the Most Important Part of Insurance

Let's stop talking about price and start educating people about coverage.

Of course, this has long been a communication hallmark of the big-box insurance companies.

Because price is important, but all policies aren't created equal and there's a lot of opportunities if you "decommoditize" the products you sell.

It certainly feels like a long shot to see this message carried across the industry, but today's tools and technology has never made it more possible.

Bill Wilson, Founder and CEO of Insurance Commentary, talks about his passion for coverage and what it can do to help your next sales call.

Joey Giangola: Mr. Bill Wilson, how're you doing today, sir?

Bill Wilson: Great, good to see you.

Joey Giangola: Bill, good indeed to see you as well, sir. And before we get started, I have to know, just based on what you do on a day-in and day-out basis, what's the best piece of advice that you've ever received?

Bill Wilson: Oh, boy, the best piece of advice. Well, probably has nothing to do with insurance or anything like that, but my dad always taught me that the best rule of life, really two rules is, number one, don't sweat the small stuff, and number two, it's all small stuff. So with everything going on in the world today, I tend to not get overly upset about it. So I think that's probably, for my peace of mind, the best advice I've ever gotten.

Joey Giangola: I mean, if you think about it, Bill, it's pretty applicable to insurance as well, although the small stuff does seem to matter quite a bit on a day-to-day basis.

Bill Wilson: Yeah.

Joey Giangola: What do you think, I guess, from that standpoint of looking at advice and insurance, because you operate at a level that most of us in the industry don't. I mean, it's hardcore deep knowledge on stuff. Is there something that you feel maybe should be adapted or adopted in terms of that attention to detail? The small stuff that you kind of pay attention to on a daily basis that maybe the rest of the industry overlooks?

Bill Wilson: Well, as you know, I'm kind of an insurance coverage nerd. That's largely where my focus is because when you think about it, for the insurance industry, everything we do, I mean, it doesn't matter what your job position is, whether you're with an insurance company as an underwriter or an adjuster, or you're an agent, or you're a risk manager or risk management consultant, or you work in support industries. If you work in roofing, reconstruction, restoration, anything like that, everything boils down to the coverage, and all of that boils down to the insurance contract. So I've always felt that the entire industry and all of its peripherals are built with the insurance contract at the foundation, and that's kind of where I've made my career. At least the last 30 years or so of it is devoted to analyzing those insurance contracts.

Joey Giangola: That's definitely something that most people don't willingly sign up for on an enjoyment basis, Bill. So, I mean, what was it about that that really said, "This is where I need to be?"

Bill Wilson: Well, I've compared this sometimes to like a Where's Waldo hunt, or Where's Waldo game, where you're... To me, I know in a seminar I did I compared it to a Clue game. If you've ever played Clue, Colonel Mustard in the library with the candlestick. To me, it's like solving a mystery. You have some things happen, you have the facts and circumstances like you're a detective and you're trying to figure out what happened and whether it's covered by the insurance contract. So, yeah, just reading insurance policies or going to a seminar or a webinar where somebody's just talking about what's in an insurance contract is... I'm not sure there's anything more boring than that. But I've always tried from an educational perspective, either in speaking or writing, to try to make it interesting, to not just talk about a policy provision, but in the context of a coverage issue or a claim.

And I think, not for everybody, but for many people, when you do that, it makes it far more interesting and much more real to you. So my suggestion is for folks that are wanting to learn that side of the industry, that they look at it from that perspective. Keep it all in context. You're not looking at just some bunch of words on a piece of paper or on a computer screen that they have meaning and they're kind of like living thoughts that are on paper.

Joey Giangola: Well, that's interesting because that understanding, and then therefore the communication of that understanding, is really where the majority of the business kind of exists, right? And the experience people have with it, in a large respect, is there something that you think dramatically kind of isn't communicated to the best of its ability when it comes to dealing with the end client who has to really deal with what happens based on that thing being covered or not? And how it is explained to them, and how to maintain their attention to at least be prepared in setting expectations properly?

Bill Wilson: Well, one of my pet peeves, and I said, "Don't sweat the little things," early on, but one of the little things, and to me it's not a little thing but that does bother me is the perception that consumers and business owners have of the industry. And it largely comes from our advertising, when it's other than direct contact with a particular agent or a company person or whatever. They know the industry primarily from a standpoint of advertising. And when you look at the advertising, it's almost all price focused, say 15%, or you get the same coverage for less money, that kind of thing. And nothing could be further from the truth.

I've written a lot of articles, but I wrote one in particular where I listed example after example of differences among common policies, like a personal auto policy. Most people think, "Well, it's auto insurance, it's all the same thing." And it isn't. When you start looking at the individual policies, there are potentially dramatic differences in coverage. So I think that's one of the issues from the perspective of the consuming public, that insurance is basically a commodity. It's all the same, it's only differentiated by price, and it's not. It's differentiated by the insurance contract, what is and isn't covered, by the claims philosophy and the service philosophy of the companies, the agents, et cetera.

Joey Giangola: So I'm guessing you've given this a little bit of thought. Is there anything that you think would counteract that messaging? Is there something that could be done that at least provides a little more responsibility to the actual depth and the details that are involved?

Bill Wilson: Well, I see some companies take a different tact in advertising, and I don't like mentioning company names much, but just to give an example, I give credit to farmers for their ad campaigns, that they do focus. I saw one recently where they were talking about, as long as you're a customer, every year your deductible is reduced by 50 bucks. Well, that's price related, but they're not talking about just go with the cheapest. Then they have their series of commercials where they show these claims scenarios and talk about, "We know a thing or two because we..." Well, I forget the exact thing. I feel like George Bush now trying to remember that statement that he messed up. But whatever their slogan is, I think everybody's familiar with it. They talk about coverage. And I think that's one thing is companies would focus on that.

And there's some talk in the industry, particularly from the policyholder side and the policyholder attorney side, of some sort of regulations or oversight from regulators, dealing with advertising and some other issues. The pharmaceutical industry, there are certain things they can and can't say in their advertisements or disclaimers they have to make. So there's a kind of a underground push for that kind of thing in the insurance industry, that there'd be some disclaimer that not all insurance is the same and that not every policy is the same. So, that's a possibility. Nobody wants to see things mandated legislatively or regulatorily, but I wish companies would spend a little more time talking about the importance of making sure you have good limits and good coverage, rather than just the cheapest price.

Joey Giangola: We know a thing or two because we've seen a thing or two, I think [crosstalk]

Bill Wilson: That's it. Yeah.

Joey Giangola: I'm going to go off the rails there for a quick second. Favorite J.K. Simmons movie. I mean, you can't go wrong with J.K. Simmons.

Bill Wilson: Yeah. Yeah.

Joey Giangola: Let me ask this question then, because I would say that maybe we've gotten away with it for so long, and comparison to the pharmaceutical industry is because there is so much of a delayed reaction time to actually consuming or seeing that message to when that thing is actually going to happen. So if somebody's going to call you back with a pharmaceutical ad, you see something, you take the thing, something bad happens. It's a pretty quick... You can correlate the events a little bit more [inaudible] Do you think that has anything to do with it just because, in most cases, that thing might never even happen, and that's what we've sort of banked on for far too long?

Bill Wilson: Yeah. There's no doubt about it. I haven't looked at the actual statistics in a long time, but it used to be that the average auto insured had an auto claim about every seven years. And the average homeowner had a claim about every 10 to 12 years. So, yeah, all the consumer sees is every year they write a check and they renew their policy, but they don't get anything in return, in their mind, even though we all know they do get something. It's a promise to pay if they do have a claim, but that's kind of the perception, and you're right, there's a disconnect between buying insurance and actually seeing the results of the product. You may never see the ultimate claim paying result of the product for years.

Two years ago, I guess it was, I had my first auto accident since I was about 17. It was about 50 years in between auto accidents. And I paid insurance that whole time and never needed the money, which I guess is a good thing, but other people did. And we know that's what insurance is all about. We all chip in to pay everybody else's claims. But you're right, when there's that much separation between payment and perceived results, then it's hard for them to understand. And you also have the deal of, "It's never going to happen to me." It's like with the whole thing going on with the pandemic. I go out and I see people with mask and without mask. And, without debating whether a mask is a good thing or not, there's a perception that it is. But some people have a perception that it isn't. That, "I'm not going to get COVID-19, so there's really no need for me to wear a mask," or whatever. So, there's a mental mind-frame aspect to it as well.

Joey Giangola: Yeah. It's definitely something that you don't anticipate a lot. And the thing that I wanted to go back to that you had mentioned that, I think is maybe even criminally underrated in terms of its overall perception, is the notion that you said, even though you didn't use it, you're still helping pay for other claims. I don't know that that message in itself is as vast across the consumer base as we might hope it to be. I've had plenty of conversations where you sit somebody down and just say, "Listen, this is why this exists. This is what allows it to happen. This is why underwriting is a thing. This is why there's..." All these sorts of things. I feel like that even concept alone is criminal in terms of its overall awareness within the insurance-buying public.

Bill Wilson: Yeah. I agree. People don't even have a fundamental understanding of the industry. And to be frank, there are a lot of people in the industry that don't really understand a lot of those things. But I've always said, again, that we spend billions and billions on advertising. Why not spend a little bit of that money or segments of the advertising educating people about what insurance is all about? I wrote an article one time and a lot of people have seen the Christmas classic, It's A Wonderful Life with Jimmy Stewart and Donna Reed. And if you recall the scene where they have a run on the bank and everybody's wanting their money back, and Jimmy Stewart has to explain to them, "Well, your money's not here. It's in Bob's home and in Mary's home," and so forth.

And that's kind of like insurance, that your premium goes somewhere. It goes to help other people. And so it's not like you're just throwing money into a black hole. But things like that, you never see that publicly conveyed to people. Again, it's the communication that we have from a public standpoint are almost entirely price-based. And that's understandable because insurance is expensive, so you want to save money and that's going to be the focus of a lot of people, but we need to talk about value, that there's more to the equation than just price. Because, again, insurance is not a commodity. It's different.

Joey Giangola: I want to switch it over to the commercial side of things because they don't even benefit from... I mean, I guess, there isn't any sort of awareness on an advertising level for the most part on that side of the business. Is there something over there in terms of how it is communicated? How coverage is discussed in the sales process that you feel is either good, it's something that maybe could be adopted on the personal side of things, or that you think maybe, again, because there's even some more variations of coverage and what might not be covered, but what is covered, that you would like to see enhanced and paid attention to a little more?

Bill Wilson: Well, I think that there's more hands-on and person-to-person communication in commercial lines, because the premiums are usually considerably higher. There's more exposure analysis involved because the businesses' exposures are so widespread they get to invest time in talking to the business owner in what they do and how they do it to determine what coverages they need, what limits, you know, business income, all that stuff. It's a much more complex process. So I think there's a much greater opportunity for an exchange of information, and I think business owners maybe have a little more understanding of what they have invested in their business compared to people, that don't think a lot about their... Probably think very little about their liability exposures.

So I suspect the difference is just the amount of time that the agent, for example, can invest in the process. And the margins are so slim on personal lines that you just can't spend two hours with every client explaining the history of insurance by going back to the Phoenicians and all the philosophical things. So, you definitely have an advantage when you have more money to fund that kind of thing.

Joey Giangola: So, I did want to ask you this question, and you talked about education and really spending maybe some time, effort, money on that experience. And you just said, you don't have the time in a lot of cases. I do think our ability to communicate in avenues such as this has allowed... At least opened the door for the opportunity to sneak in more education along the way. Have you seen something that has stood out to you in terms of like a, this is a really good form of education. It's effective, it's conveying the right message, just from the grassroots, independent agent side of things. Have you seen anything that has really impressed you?

Bill Wilson: Now, are you referring to education within the industry or to the public?

Joey Giangola: To the consumer side of things. Like from an agent, or company, just sort of... We mentioned farmers a little bit as an example, but is there something has stood out to you that you thought, besides that, from the agent level, that is, "Man, this is a really good piece of education. We need to have more of this happening at that level."

Bill Wilson: To be honest, no, is the short answer. I've not seen a whole lot other than, again, you get back to advertising. So much money is invested in that. I know a lot of entities, insurers, trade organizations, et cetera, have a social media presence and that may be a way of reaching people. But it's funny. There's a couple of insurance companies, I won't say who they are, but they have Facebook pages, and when you go look at their Facebook pages, it is at least 90%, at least 80% people griping about the company. That they're all crooks and stuff like that. And I wonder, "Why would you want a Facebook page where everybody who visits is telling everybody else what an awful person or organization you are?" But that's the reality of it. At least the ones that I've looked at.

One of the best things I think I ever saw was following the Xenia, Ohio tornado which just almost completely wiped the town off the face of the mountain. And afterwards there was a company, and I would name them if I could and I can't remember, that did a series of interviews with their customers, people that lost everything. And their customers were explaining how the adjuster was there the next day and how they did this and how they put them up there and all that. I mean, to me, those kinds of testimonials where you're talking to real people and they explain how the insurance company basically enabled them to put their lives back together in fairly short order, and imagine what it would have been like for them if there'd been no insurance backing up their property and supporting their family.

So, to me, that kind of, I guess you could call that advertising, but that kind of promotional thing to me is... I would think there's much more value in investing in that kind of communications. There would be, to me, looking at it from a consumer perspective, rather than some of these really silly but funny, admittedly funny, commercials that seem so frivolous and trivial. Talk about the important things, that insurance is critical to people's lives continuing as they were before.

Joey Giangola: Yeah. You said you've been doing this a long time. You've got a lot of experience. I'm curious if there's one thing that you feel like you've said over and over again, that just maybe has not been heard from a coverage standpoint, but really from any angle. Is there something that, if you had to say it again to an agent, that if you had to say one thing about insurance to them, this is the thing you need to be paying the most attention to, regardless of anything else?

Bill Wilson: Well, my mantra... I wrote a book in 2018 called When Words Collide: Resolving Insurance Coverage and Claims Disputes, and it was based on a seminar that I'd done for a long time and I finally put it into print. And my mantra during that time and in that book is the acronym RTFP and I use it all the time. And RTFP means Read The Policy. And I'll leave it at that. Read the policy. You've got to know the product you're selling. I have a friend who used to sell medical devices, like artificial knees and hips and stuff like that. He would actually go into surgery with a surgeon who was using the stuff for the first time in case he had any questions.

Could you imagine if he went into surgery and the surgeon asked a question, and he says, "I don't know. I haven't read the instructions myself." But there are too many people out there selling and servicing insurance that haven't read the instructions. They don't know the policies. And to me, once again, it all starts with that insurance contract. Everything we do is based on that contract. So I would say that's one single thing that in the whole commodity concept or my big things in the industry.

Joey Giangola: Bill, I got three more questions for you. And the first one, very simply, what's one thing you hope you never forget?

Bill Wilson: You mean from an insurance standpoint or philosophically, as a human?

Joey Giangola: I'll let you go in any direction you see fit, Bill.

Bill Wilson: Well, I think, and I probably learned this from my mother, is always be kind to people. To be understanding. I post a lot on Facebook and LinkedIn, and Facebook is more of a social, personal thing, and LinkedIn usually more professional. But it never ceases to amaze me how nasty people can be if they disagree with you about something. And I think we all know it's gotten worse in the past few years, and it's people in many cases that I know very well, that are great people, that they have issues that they get all bent out of shape on. My mother always taught me, it's the old, "If you can't say something nice, then don't say anything at all. Think before you act, and just be kind to each other." I think... Was it Bill & Ted's Excellent Adventure where they said something like, "Be excellent to each other," or whatever. That's kind of my philosophy. Just be a decent person and kind to people.

Joey Giangola: We can almost go home when we start quoting Bill and Ted. I mean, that's about as high as it gets from me. So I appreciate that, Bill. Other question to you on the other side of things, and you know a lot, so this is interesting. What's one thing you still have yet to learn?

Bill Wilson: There are areas of the industry that I'm weak in. I just had a... Somebody sent me a message wanting me to call them about a professional liability issue they have. And I have a working knowledge of professional liability policies, but there's no industry standard. A lot of my work is done with ISO-type industry standard forms. So from an insurance standpoint, there are areas that I don't know as much about as that I wish I did. Professional liability, crime insurance. My industry mentors, the guy who hired me out of high school in 1969 to work with an ISO predecessor organization, John Ubank. John was the best crime insurance guy that I ever knew.

And so I began to rely on that and I didn't really learn it as well as I should, because he could always answer my questions. So there are some things like that in the industry that I don't know as well as I would like to. But I'll be 70 next year, so I... They say you can teach old dogs new tricks, but I'm not sure that they're willing participants in that process. I should learn more, but even the things that I think I know, every day as I explore those I find out there are things I don't know that I thought that I knew.

Joey Giangola: Bill, last question to you. We might've covered just about everything that you might possibly have, but I'm hoping for something special here. If you had the opportunity for me to give you a magic wand of sorts, to basically change, reshape, speed up any aspect of insurance that you see fit to make it better, we'll say, what is that thing? Where's it going? And what is it doing?

Bill Wilson: Probably the claims process. We haven't talked much about the actual process, and anybody who's read some of my blog articles, I give InsureTechs a pretty hard time often for, I think, valid reasons. But one of the things I give them credit for is trying to make the industry more efficient. I mentioned my auto accident, first one I'd had in decades. I had one phone call and the rest was communication through basically my iPhone, which is all right, but they wanted me to take photographs from different angles and they had an app that I use for my insurance company. And I took photographs. The next day they told me that the estimated repair cost was something like $1,200 and it would take three to four days. Well, 31 days later, I'm already over $5,000.

I think it ended up costing about 7,000 because there were wiring harness issues, stuff that the photos never showed. Never saw a human being. Nobody ever came out and looked at anything, and it was fast, but it wasn't very effective. There's a difference between efficiency and effectiveness. Efficiency is doing things right. Effectiveness is doing the right things. So, I like the idea of being more efficient and paying quicker, but it doesn't always work. And I wish the industry could distinguish between the two, where efficiency is the right approach and effectiveness is the right approach in other things. But it does take too long to settle claims.

Joey Giangola: Bill, this has been fantastic, sir. I'm going to leave you right there.

Bill Wilson: All right. Thank you.