Covid-19 Disrupting Insurance Industry

Insurance agents say they’re busy connecting with clients, doing their best to answer questions from business owners whose companies are shuttered under stay-at-home orders caused by the coronavirus pandemic. Unusual protection measures for COVID-19, the disease caused by coronavirus, have interrupted peoples’ daily lives with mass layoffs or employees working remotely and businesses struggling. These times also have implications for the insurance industry and the independent agencies trying to make sense of it all for customers. 

Insurance agencies are deemed essential businesses under stay-at-home order. Most are receiving calls from business owners to determine policy coverage during the shutdown or outright company closings. Most conversations begin with the same question: “Is there coverage in the business income policy during the shutdown?” The unfortunate answer is, “No, pandemics aren’t covered.” 

If an insured store suffers a covered loss like fire, lightning, windstorm or hail and they can’t sell anything, we provide loss of income [coverage]. But because of the pandemic, it’s not covered by a business income form, so that’s where the insured are suffering.

How employers are handling benefits for employees during temporary layoffs is an individual matter for business owners. Most businesses, as well as their employees, are relying on government stimulus packages. 

What Some Insurance Companies Are Doing - Agents say they are reviewing coverage to learn what premium costs companies can shave off, either temporarily or permanently. 

Many large insurance companies have been relaxing some requirements, temporarily deferring premium payments and helping with auto coverage for restaurants implementing delivery service. Some confusion has risen over calls to waive cancellation and/or late payment fees and to delay premium payments. 

Long-term Effects  - Experts predict interest rate declines will weigh heavily on the entire insurance industry, but will especially affect operations in the life insurance and annuity sectors. It is expected that when things are up and running again, companies will have less business and for most it will take 12 to 18 months for companies to recover just to the point they were before the pandemic shut down the economy.  

Doing Business Differently - For the restaurant industry, many insurance agencies are actively working with outlets trying to stay afloat by offering delivery service. As such, they are writing policies to cover the gap of employees using their own vehicles for deliveries. 

For a business that does not normally offer delivery, most carriers are extending existing gaps in commercial auto coverage forms by providing temporary hired non-owned auto endorsements. The temporary extended coverage is being offered for no additional premium.

Risk levels should be reviewed and adjustments might exist for companies experiencing a change in business operations. As an example curbside pickup for a restaurant that normally doesn’t offer the service. People are inquiring about rebates on auto insurance because they are remaining at home and driving less. 

Health insurance - Another area customers are making inquiries about is health insurance. There has seen an uptick in calls from people who couldn’t afford health insurance before or didn’t carry it or felt they didn’t need it. COVID is making previously uninsured people more fearful if they did not have insurance because they were healthy or in great shape or just wanted to roll the dice.

  

Some health-insurance carriers began to cover testing for COVID-19 at 100%. The trend is that most carriers are expanding coverage before they’re required to and carriers across the board are relaxing preauthorization.

  

There is a strong push toward telehealth, which has seen a temporary expansion in coverage. Some companies are doing on-demand virtual visits via digital platforms or phone. There is an increase in people calling for short-term health insurance policies. While some companies continue to pay employees’ health insurance while they’re on temporary layoff, many workers are exploring options because they don’t know how long the virus will affect their employment.