by ·0 Comments

Insurance companies often write multiple lines of business. A given firm may insure people’s cars, the drivers of those cars, their houses, maybe their businesses. Each of these lines shows different loss characteristics and these can change over time. Part of my job is taking a loss listing and assigning the losses to categories so I can then do juju on them as similar groups. Sometimes this isn’t straight forward so I’ll contact someone more familiar with the client who may know. Today I had one of those calls:

Me: So, there’s a claim in 2004 with no real description except that it happened to a fuel oil company. Lists a destroyed vehicle, and about five million more in property damage but no one was injured. What was happening there?
Broker: Oh, that was an explosion.
Me: Any more detail?
Broker: Guy thought he had turned a valve off, turns out he hadn’t. Underground parking lot filled with gas until the building’s heat kicked on and triggered an explosion.
Me: Wow. Gonna call that auto liability.
Broker: Those are rare, though.
Me: How about the loss in 2007? That looks like a bundle of about eleven claims.
Broker: Oh, that was the beginning of the shale boom in that area. New guy operating a truck and he didn’t properly seal a container and it exploded. But that was a one time deal.
Me: Good to know, that’s AL (short for auto liability) too, and in 2011? Again, this one lists a lot of auto liability but no details.
Broker: Oh yes. A truck was on the highway and some volatiles were leaking because it wasn’t properly closed and it started a fire and there was a small explosion.
Me: Uh, huh. Soooooo….
Broker: That’s probably AL too.

I’m an actuary and don’t really do loss containment or preventative action, but it seems like if your three largest claims are all caused by exploding vehicles that someone didn’t properly operate, maybe you should work on that.

by ·0 Comments

My father asked me to leave his car insurance policy and while I lost the multicar discount I’d enjoyed being merely one car in the 12 vehicle Robinson fleet it was nice to finally get the coverage I’d wanted.  I had a policy picked out from Progressive and one from State Farm.  Progressive allowed me to purchase online and State Farm required a call to finalize the rate so I contacted my local agent to see if they could do one better.  I talked to the fellow and immediately felt like I was talking to a sack of grapefruits but the final two straws were as follows:

Him: Ok, and stacking your uninsured/uninsured rider will cost an extra $12 but double your coverage.
Me: Why would I stack coverage for a single vehicle?
Him: Some people just want the extra coverage.
Me: …..
(Stacking is an option where if you have multiple vehicles, the benefit is applied separately to each.  So if you have a $100,000 policy and your two $75,000 cars get hit at the same time, you’ll be covered for both up to a maximum of $200,000 instead of just $100,000.  To the best of my knowledge, attempting to collect on a stacked policy on a single car would violate state law.)

Me: I saw online it asked me for my most recent citation.  Progressive didn’t, why?
Him: We have special discounts for drivers who’ve received infractions citations.
Me: So… you reduce the rate for people who’ve got speeding tickets?
Him: Yes, people who get tickets tend to be safer drivers.

I dare say a cattle feces inspector has never encountered bullshit that large.  I went with Progressive.

by ·0 Comments

While I was out, people’s cars were being knifed in the parking the lot.  Today, a leader came in asking how this damage was going to be paid for and we talked about deductibles, privity and transfer of liability for publicly trafficked businesses.  The leader left much illuminated and more understanding of how property/casualty insurance works such as how someone damaging their car on camp property is different from a kid being injured and so on.  I imagine these questions had been asked by a dozen leaders earlier in the week while I was gone and my office chums had to dance awkwardly through the answers.   This is the one time I could have swung in from a vine to help hapless leaders and staffers confused about insurance law.  I could have been a hero.  Stupid gastroenteritis.