If you're looking for a better customer experience, you've probably heard this pitch: You should be buying insurance.
It's a familiar, and increasingly urgent, proposal. And there's a reason for that. U.S. property-casualty insurance companies, reeling from underwriting losses of $5.1 billion in the first half of 2017, are looking for new customers, according to Deloitte's 2018 Insurance Industry Outlook. There's a similar sense of desperation in other parts of the insurance industry.
But when is buying insurance a good idea for you?
When my readers ask me for consumer advice, I tell them to be skeptical of the come-ons. Sure, insurance can help offset losses and can make you whole when something goes wrong, enhancing your customer experience. But you can also spend your hard-earned money on something useless. You have to be careful.
Some forms of insurance, such as an annual travel insurance policy, can make a dramatic difference. And there are new insurance options you should be aware of, that can upgrade your customer experience. The best insurance companies understand that it's all about better customer service, and they're trying to help.
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A better customer experience with an annual travel insurance policy
Since about half of the cases I mediate through my nonprofit consumer advocacy organization come from the travel industry, I get a lot of questions about buying travel insurance. One often overlooked option -- but one that is being increasingly promoted by insurance companies -- is the annual policy.
Several travel insurance companies, including Allianz Travel Insurance, HTH Worldwide, International Medical Group, RoamRight, Seven Corners and Travel Guard, offer annual policies. You can also compare policies online at InsureMyTrip.com, Quotewright.com, Squaremouth.com, TravelInsurance.com, or TripInsurance.com.
An annual policy costs around $500 per person, give or take, which pays for itself after just two trips.
But will annual policies make the customer experience better? I've interviewed dozens of annual policyholders, and I happen to be one, too. Here's what I can tell you: I have an AllTrips Executive plan through Allianz. It covers my entire family for the year and costs $1,836 per year.
I've made numerous claims on my policy, like the time my son and I got the flu when we were in Denver; or when I had a severe case of conjunctivitis in Spokane, Wash. It also covers the things travel companies won't, like lost luggage or trip interruptions -- in other words, it makes the travel experience go the way it's supposed to.
If you're a frequent traveler, and you're as tired of terrible service as I'm sure you are, an annual policy can make a difference. But keep reading for the important fine print.
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Medical insurance can offer a better customer experience, too
Health insurance is another case where buying insurance can provide a better customer experience. At least that's the assessment of Lisa Zamosky, the senior director of consumer affairs at eHealth, a leading private online health insurance exchange.
"Medical bills can bankrupt you these days," she says. For example, the cost of a two-hour visit to the ER can run well over a thousand dollars, even without special tests and X-rays. No wonder hospitals have so-so customer satisfaction scores.
"If you have an unexpected injury or illness and end up an inpatient at the hospital for multiple days, your bills can easily run into the tens of thousands of dollars. Unless you have a huge rainy day fund for medical care, you’re well on your way to bankruptcy," says Zamosky.
Buying insurance -- and not just any health insurance policy, but the right one -- can help offset the skyrocketing costs of medical care in the United States. That certainly leads to a better customer service experience.
But it's easier said than done. Unlike travel insurance, premiums are not always priced reasonably. In fact, I had to drop my ACA-compliant policy after a year because the premiums almost doubled. I now have a high-deductible policy that I pray I'll never have to file a claim on.
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Buying insurance is about "peace of mind"
Experts say buying insurance is about more than improving the customer service experience.
"Almost any insurance coverage is about peace of mind," says Anna Drake, a senior insurance agent for Workerscompensationshop.com, a site that sells workers compensation insurance. "For example; if your home is paid off, what happens when the water main breaks and floods your basement? Do you want to eat that cost, or turn it into your insurance carrier? Someone purchasing insurance must determine how valuable is that peace of mind?"
Your home warranty might cover you, but odds are, you'll have to pay out of your pocket for the repairs. So how much is that extra peace of mind worth?
Insurance companies realize that this somewhat amorphous concept of better customer service is the main selling point for insurance. Jeff Somers, the president of Insureon, a site that sells small business insurance, says carriers understand that they're not just selling insurance, but better service, too.
"Insurance isn’t the ultimate product," he told me. "The customer experience you provide is."
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For a better customer experience, more is not always more
As a consumer, it's important to look past some of the advertising rhetoric, when it comes to buying insurance. For example, I'm on the road more than 300 days out of the year, so an annual travel insurance policy is an easy decision. If you're not a frequent traveler, it isn't. You need to calculate the number of days you'll be away from home and can use the insurance.
The same formula applies to other types of insurance, including medical, small business, liability, property and casualty. Just because the company promises you'll have a better service experience doesn't automatically make it so. Read the policy carefully, apply it to your circumstances, and make the decision in consultation with a qualified insurance professional. More is not always more.
I publish the names, numbers, and email addresses, of the executives at the major insurance companies -- just in case insurance fails to work as promised. And if that doesn't work, you can always contact me directly.
Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.
