How to Help Your Clients Value More Overlooked Insurance

Joey Giangola: Mr. Joel Cavaness, how are you doing today, sir?

Joel Cavaness: I'm doing great. Thanks Joey.

Joey Giangola: Joel, before we get into anything too serious, I got to do this first. Is there an underrated recreational activity that you think people should be paying more attention to? Taking a little more seriously?

Joel Cavaness: Oh, I suppose I always default back to golf, Joey. I've been playing golf since I was very young. It can be almost anything. It can be an activity, it can be recreation, it can be sport, it can be about anything that you want it to be. You can play with friends, you can play with competitors. There's so many different aspects to golf and other than maybe a few people in the history of golf, nobody's ever really mastered it. It's a game that you can never master. It's a game that you can always improve. There's so many different aspects to the game, whether it's your short game, whether it's putting, it's your drivers, whether it's your irons, all those different things take a lot of practice, a lot of work, and you never master it. So I suppose it's probably a lot of things that we do in life. You never completely master your craft. There's always areas for improvement.

Joey Giangola: Do you enjoy playing around, even if people aren't as maybe into it as you are? Can you still dial it back and sort of adjust your expectations?

Joel Cavaness: Of course. I've played with every level of golfer, known demand. I've played with professionals. I have played with people that could barely hit it out of their own shadow. When you play with people like that, it's all just about having fun. If you're not having fun, then you shouldn't play. I tell people that all the time. They get really upset about the way they're playing or the conditions that they're playing in or candidly, a golf course, the condition of the golf course, the difficulty, it's like your intention is to be out here to have a good time, get some fresh air, maybe even have a beer or two. I enjoy playing with people from all levels.

Joey Giangola: For me, joy, I'd have to go with Bocce. It's a game I feel like is overlooked. But not just in the backyard, it's got to be on a court. There's got to be some walls, there's got to be some limestone happening. I feel like that's not really playing Bocce until you're in that scenario because otherwise it's just a little too random for my taste.

Joel Cavaness: I've played Bocce ball many times and I've probably played it on every surface known to man with courts that aren't level, courts that you really have to work at to try to figure out which way everything's moving. So yeah, I agree. But that's another game. That's fun. And your competition could be at all levels.

Joey Giangola: Well Joe, I got to switch things over to insurance a little bit and I kind of wanted to get your thoughts on underrated area of insurance. What has got your attention right now in terms of insurance that you think maybe people are taking for granted or not paying enough attention to?

Joel Cavaness: Well, I suppose current events sometimes shift your thinking. If you'd asked me this a month ago, I would've probably geared the conversation towards cyber because I don't believe that people, generally, large organizations take a keen interest towards cyber covering the event of a breach. And it's really not just the insurance, it's really the services that go with buying cyber. If you buy cyber, you typically get an awful lot of help if there is a breach. So you get professional help of how to handle the breach, how to handle the "bad guys," all those different things that you get with cyber. But today, as we've gone through a major catastrophe here in the US and I look at the way people buy insurance. When I look at some of the unfortunate results and I look towards flood insurance, the estimate and the area affected was somewhere between 14 and 18% take up in the national flood insurance program.

Joel Cavaness: I would have to tell you today, reading the most recent statistics, that a very overlooked area is flood insurance. And these poor people down in the southeast that didn't buy flood insurance for whatever particular reason, hopefully that it was an informed decision that they based it on. But when you have that kind of event and it was a major water event, of course it's wind, of course it was.

Joel Cavaness: But at least based on everything that I've seen and read so far, it's a major water event. And so many people are under the misimpression that their insurance policies are going to protect them from rising water, and that is truly not the case. And you need to buy that additional protection, whether it is through the NFIP, which is of course a government backed program or from the private market, which is available pretty much everywhere to be able to cover the event of flood Because flood's a mess. The whole thought of having your entire bottom floor of your home or business with nothing but water in it is a lasting event. And you have to handle that particular situation very carefully so that you don't have problems down the road. So I feel bad for the folks that didn't have it, their life is upside down. And then the fact that they don't have any type of protection for the loss. So I would tell you that flood insurance is definitely an overlooked aspect of their insurance portfolio.

Joey Giangola: Yeah, it's pretty interesting. And when you think about it from the consumer side, they might have a lack of education. From the agent's side, they might have a lack of interest or ability in some cases. When you look at a problem like that from your position, how do you look to close those gaps? What can we do to help each other want to work on that problem a little bit more?

Joel Cavaness: Yeah, I mean certainly an event like Vest brings this situation forward into particular headlines. Obviously, it's an additional coverage to sell. Nobody I've ever met so far anyway, wanted to buy more insurance. It takes a pretty unique person to say, "Give me everything that I should possibly have and overinsure me." I haven't met that person yet. But the fact that through the renewal process of an individual, the opportunity to sit down with a particular insured or communicate with an insured and make recommendations to them based on where they live. Not everybody needs flood insurance. There are awful lot of areas in the US where flood insurance may not be needed because of the way that the location of the property, whatever it might be. But there are an awful lot of people that are near areas that can flood. And you're surprised when you look at flood mapping, the areas that do have propensity to flood. It's really interesting.

Joel Cavaness: And so again, communicating to the client. It's very difficult and I understand this to communicate everything that's covered or everything that's excluded, but there are certain major aspects of a catastrophe opportunity where flood should be offered and it's an opportunity to, a, sell additional policy, which we're all doing that as salespeople. And two, to be able to protect the best interest of your customers. So when that claim occurs and they call and say, "I have had a flood event," you don't have to say "you don't have any insurance for that." That's a difficult conversation, of course. Nobody's going to be happy. And so the opportunity to say, "Yeah, got it, you're covered." What a great feeling.

Joey Giangola: You've obviously spent a large portion of your career of dealing with the insurance that a lot of people didn't want to focus on, the wild and wacky, if you will. Do you have any advice for somebody that maybe has a hard time getting into that habit of going after that extra policy. A time when you maybe sold a coverage that you didn't necessarily want to focus on, but then a year later you had that conversation, we were able to tell somebody, well, we're all setting up because we took care of it.

Joel Cavaness: Yeah. There're different aspects of the way that people bring things up like that. The best informed insurance agent or broker shows an insured or perspective insured what they should consider on buying and why should you should consider to buy this particular coverage. In some cases, honestly, it's required by a mortgage holder or a bank or a lender, whatever it might be. And then you're required to buy certain types of insurance because you have a loan on the property or the home. But really laying out in a sheet of paper, so to speak, a proposal, the coverages that are recommended that you consider purchasing. Some firms go as far as saying, "Okay, we've talked about it, you've elected not to buy this particular coverage that I've recommended so sign here that we talked about it." That's a protection for your E&O. Here, I've made this offer of insurance to you. You made the decision not to purchase it. So sign here so that if something does happen down the road, I can say, "Hey, we talked about this and I advised that maybe you should have purchased this coverage."

Joel Cavaness: There's a lot of different aspects, but people in the process of insurance where they're looking for advice are looking for areas that maybe they didn't particularly think about and what might happen if a certain event occurs.

Joey Giangola: Yeah, and you mentioned cyber earlier when talking about coverages that are underserved or whatever, and it feels like we've been hearing about cyber for quite a while, but yet still it has yet to of achieve that penetration rate that we talk about all the time. If you had to give a pep talk to an agent that is trying to break into something that they're having a hard time struggling with, what would that be? To give them the extra confidence to stick with something to the point where they might feel satisfied that they gave it their best shot?

Joel Cavaness: Yeah. My particular way that I educate myself is I read things. I might, from time to time, listen to industry specific experts talk about a particular coverage so that I'm comfortable knowing the ins and outs of the coverage. And I think that the ability for somebody to talk to a client and say, "If you take credit cards, you have a cyber exposure." It is purely and simple as that. If you have credit card information or any kind of personal information in your systems, personal identifiable information that you collect, then you have a cyber exposure.

Joel Cavaness: So it's very simple to identify the exposure that a client has and then the ability in today's marketplace to be able and get a quote for cyber, especially for small business, it's fairly easy. RPS has a great website for that. You can go in and click rpssmallbusiness.com and you can get a quote in a matter of a few moments. So I think that all small businesses have the exposure, because most of them that I know, when I go in if they don't take credit cards, a lot of people walk out. If you're taking a credit card, if you're collecting a personal identifiable information, you have an exposure to cyber. So it's easy to sell the coverage and it's relatively inexpensive in my mind, given the exposure at hand.

Joey Giangola: Joel, if you had to give maybe your guiding principle to discovering a new opportunity. If you're sitting at agent's shoes, is there something that you've always sort of keyed in on how to maybe look for something that might have potential?

Joel Cavaness: Well, I think obviously in most cases we all deal with all kinds of different I insured, whether those are personal or commercial, everybody has to buy insurance. I mean you can't have a global market without people buying insurance. And candidly, that's why I love the business because it's a form of protection that the economy broadly has to have. And knowing that, it makes it great because everybody typically buys insurance. So the ability then to sit down with a particular, and that's the other thing I love about this industry is there's so much to know, so much to learn. You get to see how other businesses operate and that's part of the job, understanding the exposures that a particular client would have and then how you address those through insurance protection.

Joel Cavaness: And that's pretty fun in my mind. So I think it's really more about enjoying what you do, enjoying the fact that you can protect a client in a true time of need. Insurance is just something that a lot of people think about that they have to buy it, but really the opportunity is when an event happens that you can sit down with them and say, "Don't worry, this is covered, we're all taken care of." And putting people's lives back together from a financial point of view is really the cornerstone of what we do as an industry.

Joey Giangola: All right, Joel, I got three more questions for you, sir.

Joel Cavaness: Okay.

Joey Giangola: And the first one is, what's one thing you hope you never forget?

Joel Cavaness: I hope I never forget what got me to where I am. My values, the way that I hold myself out, and the fact that we're all just people and you have to appreciate everybody for who they are and what they stand for. So I hope I never forget how I got to where I am today.

Joey Giangola: All right. Now on the other side of that, what is one thing you still have yet to learn?

Joel Cavaness: Oh man, there's a lot that I have yet to learn. This is a very complicated world of course. I had the opportunity to visit a research hospital called the "City of Hope" a month or so ago, to talk about some fundraising that I was doing for the City of Hope Research Hospital. And I got to meet with several research doctors. They explained what they do for a living. How they go about it, the work behind the scenes. On the basics of course, you understand what they're trying to do, but really when they get into the detail of all of the things that they work towards and how they go about it, first it's mind blowing. Second, it's impressive that there are this many smart people out there that are trying to solve a huge problem. So I guess from your question of what am I yet to learn, boy, there's a lot. I know a lot about insurance, but get outside of that, there's a big world out there.

Joey Giangola: All right, Joel, last question to you, sir. If I were to hand you a magic wand of sorts to reshape, change, speed up any part of insurance, what's that thing? Where is it going and what's it doing?

Joel Cavaness: Well, I suppose if you get to the core of insurance, which I said was really the guiding principle of being able to collectively, as an industry, put money in a pod and then when an individual has a problem to be able to solve that problem. So if I had a magic wand, I would tell you that insurances become an extraordinarily complicated business. And that's candidly for good reason. Things have happened in the court systems or other places which have required us to modify wording, but it's become way too complicated. The wording in the contracts is lawyer-ish, and it's very difficult for the common person to understand.

Joel Cavaness: So if I had the magic wand, I would make it a much similar, less painful process and hopefully the claims process I would obviously make much simpler as well, because I think that's how sometimes we get a bad name because we've made it overcomplicated. And I think simplifying it would be just a wonderful thing for everyone involved.

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

Joel Cavaness: Great. Thanks for your time.