Shopping resources for insurance consumers

To: Interested
Parties

From: Amy Bach,
Executive Director, United Policyholders , amy@uphelp.org

Re: Shopping
resources for insurance consumers

Date: February 23,
2011

Through a “Roadmap to Preparedness” (R2P) program,
non-profit United Policyholders is working hard throughout the United States to
educate consumers on the importance of buying the right kind and amount of
insurance, and not just shopping for the lowest priced policy. The program includes our work on NAIC model
consumer guides, our library of online and printed tips and shopping tools, our
UP Home Inventory flash drive (co-branded with the Red Cross in one region of
California), and preparedness workshops (CA. only).

United Policyholders established the R2P program to take
lessons learned after disasters and turn them into preparedness messages and
calls to action, and to contend with the new media environment in which more
consumers and bypassing traditional agent/brokers and buying their insurance
through online and toll-free numbers.
There is more need than ever for consumers to understand the importance
of coverage features, not just price. We
believe this goal will benefit insurers and consumers equally.

But it is almost impossible for even the savviest consumer
to compare features of insurance policies before buying. Sample policies are not typically
available. Some states, like California,
have implemented mandatory disclosures, (e.g. CA. Ins. Code 10102) that
insurers must provide to customers after they’ve bought a policy. The California Residential Disclosure Form
is designed to explain certain key features of the purchaser’s policy in
comparison to other available options.
It focuses on distinguishing between Actual Cash Value, Replacement,
Extended or Guaranteed Replacement Cost coverage and on Building Code
Compliance/Upgrade coverage. It doesn’t
purport to cover all the features or exclusions in the homeowner’s policy –
just a few of the “big ticket” items.

We want to hear any and all ideas for giving consumers
access to sample policies and/or pre-sale information that will allow
people to compare features. We want to
continue to engage in constructive dialogue with industry representatives on
how insurers, agents and brokers view the California disclosure form.

We look forward to discussing these issues again at the upcoming NAIC meeting.