Here is another startup that is going to revolutionize the industry: I first talked about a recent interview with their CEO on my LinkedIn Discussion Board. (If you’re not aware, I communicate about industry issues on LinkedIn and via Twitter — you can access them and subscribe from my Contact page.) This startup I want to talk about claims that it can place homeowners insurance without an application of any kind. The company basically only needs to know your name and address, then it gets all the data it needs from other sources. Presumably this process takes a couple of minutes — and that’s it. I invite you to read the interview and then join the discussion. This “We can write your insurance in two to three minutes” mantra is becoming a common theme with many of these insurance startups. The rationale is improving the customer experience. But what about the customer experience of having a six-figure (or greater) uncovered loss because nobody took the time to prompt the consumer for exposures? See also: Why A Homeowner Should Know About Complying With Workers' Compensation Laws I make this point in the LinkedIn discussion:
“If you were going to sky dive for the first time, would you pack your parachute yourself? Would you insist that someone else pack it as fast as possible with almost no attention to detail because you’re in a hurry? Or pack it with their eyes closed? My insurance program is my financial parachute. There are no shortcuts to security unless you’re buying insurance with no exclusions or policy limits, and most of what is being sold on the internet is far from that.”
So what do you think? Are regulators who welcome these startups with open arms really doing their constituents a service by embracing “fast and cheap”? Or are they simply insuring (no pun intended) financial ruin for perhaps a great many of them? For more discussion, comment on this article and visit the LinkedIn discussion on this subject.
