MURPHY’S LAW
MURPHY’S
Law Of Insurance
W
e are all familiar
with the old adage
of Murphy’s Law:
“Anything that can go
wrong will go wrong.”
This has never held truer than it does
now in my 35 years of experience in the
insurance industry.
In 2017, insurers paid out a record
$135 billion to cover losses from
natural disasters driven by the costliest
hurricane season ever in the United
States. Overall losses, including
uninsured damage, came to $330 billion.
The United States accounted for 50
percent of these losses. The damages
in 2018 from Florence in the Carolinas
and Michael ravaging the panhandle of
Florida have yet to be calculated but will
surely result in staggering numbers.
Losses from natural disasters are
beyond our control but will nonetheless
adversely affect insurance companies
as they continue to negotiate their
reinsurance treaties in the coming
months. Yes! Insurance companies take
out insurance to transfer some of their
risk, and as the reinsurers increase their
pricing, it typically trickles down to us,
the end user.
The acts of God that are out of our
control, like hurricanes, make it that
much more important to address the
components that we do have control over.
What is in our control, you ask? The
simple answer is stay ahead of loss
control. When I first became an
insurance agent in my early 20s, there
was nothing worse than a customer
saying, “Yes, I trust you to protect my
biggest assets and to service my account,”
then a month later, after an insurance
company inspection, be back at their
office explaining that they have to spend
money to repair potholes, cut back trees,
or fix broken railings.
I quickly realized that is when Murphy’s
Law kicks in and that pothole that’s yet
to be filled is the one that a resident or
guest will trip on. The loose railing will
be the one that someone falls over and
that tree that needed to be cut back will
be the one that falls on a building.
It goes on and on. The association
that does not have dryer vent cleaning
scheduled annually is more likely to have
a fire due to it not being scheduled. If
there is no burst resistant washer hose
mandate, you will have water damage
claims. And if there is no water heater
replacement program . . . I think you get
it by now!
So what can be done? A question
frequently asked is, “If we do these
things, will our premiums go down?”
The answer is not always easy or one
that wants to be heard because rates will
not necessarily go down. So why is it so
important we be proactive in our loss
control? Now that’s an easier answer. It
protects your insurability.
Let’s take the case of the unfilled
potholes. Filling them may cost a few
hundred dollars now, but by not filling
them, it could cause a trip-and-fall
hazard, potentially resulting in a severe
injury that shows up on the community’s
loss experience and affecting their
ability to procure comprehensive and
competitive coverage. It now becomes a
no brainer.
The moral is, we all need to be reminded
that being proactive with our loss
control may cost a little now, but it will
definitely improve insurability and save
money in the long term as well as protect
the safety of our communities.
BY: BERNIE COSENTINO
VICE PRESIDENT, JGS INSURANCE
Bernie Cosentino is celebrating his 33rd
year in the insurance industry. Born,
bred and educated in NJ he is a proud
father to his adult children Joseph and
Maria. Bernie is currently in his 17th year
at JGS Insurance as A Vice President
and broker/producer diligently pursuing
the most competitive and comprehensive
insurance program to a wide range of
customer base.
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