Did you know Ohio ranked 6th in the nation for hail damage through July 2024?

Hail damage to roofs or siding can lead to significant challenges when it comes to claim payments and processing. Understanding the coverage options offered by your carriers—and educating your clients—can help prevent misunderstandings and reduce the risk of E&O exposures.

I recently spoke with an agent who used ChatGPT to help interpret some policy language. With the rise of AI tools like ChatGPT, getting quick answers has never been easier. Still, it’s essential to double-check their accuracy—especially when dealing with complex topics like insurance policies. AI can provide useful insights, but it may not always reflect the exact legal or regulatory wording used in your state. Verifying responses against official sources ensures compliance and prevents costly misinterpretations.

A recent discussion on the interpretation of insurance policy language highlights an important distinction between “consistent in appearance” (ChatGPT’s response) and “reasonably comparable appearance” (the actual wording found in Ohio’s Administrative Code). This seemingly subtle difference can significantly impact policyholders and agency operations alike.

Defining the Key Terms

When it comes to repairs or replacements, the language used in a policy dictates what is considered an acceptable outcome. Here’s the difference between ChatGPT’s interpretation and the actual code:

• Consistent in Appearance – This phrase suggests a high level of uniformity, implying that any repaired or replaced portion must seamlessly match the surrounding area in color, texture, and material. Even minor differences could be problematic.

• Reasonably Comparable Appearance – This is the wording found in the administrative code and offers a more flexible standard. It does not require an exact match but rather a similarity that a reasonable person would find acceptable. Some variations may be allowed, particularly when an exact match is impractical or unavailable.

Because the interpretation of “reasonably comparable in appearance” can vary from person to person, managing expectations is key. Clients often experience confusion and frustration over claims related to roofs and siding. This is where matching endorsements become valuable.

The Value of Matching Endorsements

Matching endorsements can help alleviate policyholder frustration by ensuring that repairs maintain a visually cohesive look. Offering these endorsements when available provides clients with an added layer of protection, giving them peace of mind. Instead of worrying about slight variations in shingles or siding, they can rely on coverage that ensures a more uniform appearance.

For insurance agents, providing clients with a clear choice is essential. Some clients may be particular about exact matches, while others may not notice minor differences in materials. The best approach is to educate clients on the endorsement and allow them to decide whether they want to add it to their policy. If they decline, having them sign off on the decision is a prudent way to mitigate Errors & Omissions (E&O) risk.

Best Practices for Agencies

To effectively manage this aspect of policy offerings, consider these best practices:

• Educate Clients – Explain the difference between standard coverage and a matching endorsement using straightforward language and real-world examples.

• Provide Cost Estimates – Be prepared to discuss different limit options (which vary by company) since pricing will be a common concern.

• Use Supporting Materials – A simple one-page document outlining the benefits of the endorsement can help team members when discussing coverage options with clients.

• Document Client Decisions – If a client declines the endorsement, having written confirmation protects both the agency and the client from potential disputes.

Final Thoughts

Understanding policy language and proactively offering solutions can enhance client trust and reduce potential coverage disputes. By taking a client-focused approach and making matching endorsements part of the discussion, insurance professionals can provide valuable guidance while also protecting their agencies from E&O risks.

To aid agents in navigating conversations around Matching Endorsements, OIA has created the Matching Endorsement Sell Guide, which outlines the potential benefits of adding it to a policy—without having to rely on AI for an explanation. If you have any questions or need further clarification from the OIA team, don’t hesitate to contact us.

About the Author:

A millennial in a risky business affectionally referred to as The Beyoncé of Insurance – it’s no secret that Ashley Fitzsimmons is an insurance nerd with a passion for this industry. She’s been in your shoes. After nearly a decade as the fourth generation in an independent agency near Scranton, PA, she switched gears from educating her clients to educating agents as the Director of Professional Development at OIA.

Her love for her clients helped secure the 2018 National CSR of the Year award. She was even able to turn her misadventures in online dating into writing policies. In traveling to different events and meeting hundreds of agents, she realized she can make an even bigger impact by helping independent agents thrive all over the country. Connect with her. Use her as a resource. Or just have a martini with her – whatever it is, she’s here to help!