Insurance Markets for Your Clients


The Text Trap: Why 160 Characters is Not Enough

Nov 06, 2019
Approximately, 40% of the U.S. population is under the age of 30, which means that a significant part of our workforce is composed of young people who bring new ideas and technology to the workplace. This is as true in insurance agencies as it is in any other business.

People are growing up in a world where their primary forms of communication include texting, Snapchat and Instagram. Forget about emailing or calling someone on the phone. Our young employees want immediate responses, which is what they have come to expect from technology. I challenge you to find one person under 30 years old who does always not have a smartphone with them.

Unfortunately, with these forms of communication, agencies open themselves up to significant potential exposures. Take the case of a 21-year-old producer who had just obtained his license and was starting out in the world of insurance. A longtime friend reached out to him to procure coverage for a newly purchased Dodge Charger. The friend had contacted the producer via text as that is how they always communicated.

These texts, which were limited to 160 characters, included pertinent information about the car’s make and model, vehicle identification number, coverages and available limits. The producer didn't think there was anything unusual about getting information in this manner as that was how the pair always shared information.

Once the producer received the initial quote, the key information was transmitted via text. Within that text, the producer indicated that he would be able to obtain better coverage but never explained what the better coverage included. In another text, the producer advised that there was an option for lesser coverage at a lower premium. Again, coverage differences were never explained to the client. Most significantly, the client rejected UM/UIM coverage via text and never actually signed the mandated rejection form because the producer never sent him an email or met him in person.

You won’t be surprised to hear that the client was involved in an accident where the at-fault driver had the state-required minimum liability limits and the medical bills alone far exceeded those limits. A New-York minute later, a lawsuit was filed that named the producer and the agency as defendants.

The plaintiff and former client will be able to submit all the text messages as evidence, which means they become public documents. In addition to the fact that the producer’s method of gathering information was inadequate, much of the language within the texts was very unprofessional, which will undoubtedly cast a poor light on the producer before a jury.

As composer Libby Larsen observed, "The great myth of our times is that technology is communication." That's particularly true when you allow the means of communication to dictate your message instead of the reverse.

An insurance producer must communicate fully with a client to accurately determine the client's needs and clarify what they are requesting from the agency. Texting does not lend itself to fulfilling the duties of an insurance agent. Moreover, by foregoing in-person, email and telephone communication, an agency opens itself up to error & omission claims.

About the Author

Barbara Rocco is an assistant vice president and claims specialist with Swiss Re Corporate Solutions and works out of the Chicago office. Insurance products underwritten by Westport Insurance Corporation, Kansas City, Missouri, a member of Swiss Re Corporate Solutions.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article.

The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group ("Swiss Re") and/or its subsidiaries and/or management and/or shareholders. Copyright © 2018, Big “I” Advantage, Inc. and Westport Insurance Corporation. All rights reserved. No part of this material may be used or reproduced in any manner without the prior written permission from Big “I” Advantage. For permission or further information, contact Agency E&O Risk Manager, 127 South Peyton Street, Alexandria, VA 22314 or email at