Coronavirus and the Insurance Agent: How to Protect Your Clients

Fran Majidi
March 10, 2020
Coronavirus and Insurance

Two years ago Munich Re, a reinsurance firm, tried to underwrite an insurance product that would cover a company entirely if it started to unravel due to an epidemic. The product didn’t get very much attention. Now, with the fast spread of coronavirus in the U.S.A, the firm told The New York Times, that the company now has “a six-month backlog in getting quotes out.”

You heard that right: Six months of quotes. The firm also says that it’s too late for most of these companies to buy the coverage they provide. “We can’t insure a burning building,” said the firm. All this brings us back to the golden rule of insurance: you can’t sell a product mid-catastrophe.

As an agent, you know that you can’t sell homeowners insurance in the middle of a tornado or right after one. You will also have a hard time selling a life insurance policy to a dying man (it would be beyond expensive). Basically, it’s hard to sell any insurance product once any kind of unraveling is in progress.

However, it can be argued that coronavirus in the U.S. has not yet reached epidemic or pandemic proportions. For one thing, many commercial insurance companies are still selling products that may prevent businesses from going under. For the elderly who are at most risk, Medicare Part C is still an option and so is Medigap.

Chances are that you do not offer reinsurance and you do not have a backlog of customers asking for quotes because of coronavirus. However, you can gain some valuable business and perform a very real service to some businesses because of your knowledge about how insurance can save them from the fallout of coronavirus.

Yes, coronavirus is a good reason to sell insurance, because you’re helping consumers who need your protection.

Seniors, Medicare Supplements and Medicare Advantage

At different times of the year, people turning 65 are buying Medicare, most of them only half understanding what their options are. You can help seniors by explaining what they need to know about the typical symptoms of coronavirus, which include coughing and respiratory infections. Sometimes, these symptoms require special respiratory equipment, like oxygen tanks, and special oxygen therapies.

Without Medigap, some treatment costs will likely have to be paid out-of-pocket. More than any other group, seniors are vulnerable to getting sick with coronavirus and need the right coverage that will take care of coronavirus-related treatments. Seniors also tend to live on a budget. Now’s your chance to save them some money and make money at the same time.

Even though it’s a terrible time to shake hands in-person with prospects now that everyone’s gone into hiding for fear of catching the coronavirus, it’s a great opportunity to do business on the phone. It’s a great time to get live calls or data leads instead of wasting time at networking events that will probably draw really thin crowds. Besides, seniors are not the most social people, and using a reliable lead source is an important tool in reaching this demographic.

Many seniors are not aware that they may have superior coverage with Medicare Advantage versus Original Medicare. It’s important that you review your clients’ healthcare needs to decide which will protect them best in case of illness.

As it stands now, coronavirus testing is covered by Medicare. Also, telehealth will be opening up for Medicare patients to avoid filling doctors’ offices with infected patients and further spreading the disease. Tell your prospect that there is a $1,408 deductible and coinsurance will begin after the second month, starting at $352 (and rising gradually).

In some cases Medicare Advantage, as an alternative to original Medicare, saves seniors money in the long-run. Discuss this possibility with the senior you’re quoting. To the clients who do the number crunching and find that Original Medicare makes more sense for them, explain how Medigap will take care of many expenses that Medicare won’t cover. You also need to stress that your client will be fined if they don’t buy Medigap as soon as they become eligible for Medicare.

Business Interruption Insurance and Workers Compensation

Businesses may be forced to close down due to so many people self-quarantining and staying away from others. If you have business owners as commercial insurance clients, they may already be feeling the sting of the coronavirus. If you haven’t spoken with them in a while, it may be worth reaching out. Not only do you not want to be the good-weather agent, you’ll want to help protect these businesses while they are floundering.

For one thing, it’s more important than ever to make sure your client has workers compensation, which is required in nearly every state. Also, if an emergency situation is declared, urge your clients to tell workers to stay home. If an employee gets sick while commuting to their place of business during an emergency quarantine, the business owner may be liable for their illness because you asked that they “travel to infected areas.” Workers compensation would likely cover that person.

If your client suspects that a worker is sick, it’s important they report it so that the employee is tested. This is important because if that person is infected, all other workers who came into contact with that person need to be tested too. Explain to your client that he/she should follow these rules strictly, to avoid being held responsible for covering multiple employees’ illnesses with workers comp.

Which Coverages Will Protect Businesses from Coronavirus?

You may or may not have sold business interruption insurance coverage in the past. If you did, it was probably to protect against physical loss or damage, not a pandemic. However, some policies will cover an epidemic, a pandemic or losses associated with illness at or near the insured building. This is why it’s always a good idea for businesses in the hospitality, entertainment and retail industries have business interruption insurance.

If your client imports goods from a country that is considered “an infected area” your client may have to change vendors or partners. If the business is heavily impacted by the restriction, they may be covered by trade disruption interruption insurance, if they have it. If they don’t have it, it’s a good idea to buy this type of policy before more countries are placed on a ban.

Buy Insurance Leads

The phone and internet are how business is being conducted across the country. Let us help you keep the phones ringing and your agency signing new business, even with the coronavirus on the rise. We’re here to help.