The Perception Gap

We’ve heard the complaints over and over again: “The insurance industry does a terrible job of public relations.” “The general public thinks insurance people are just one step above car salesmen.” “There’s perception gap between the reality of the insurance business and the good that it does, and what consumers think about it.”

Why the perception gap? The following story may offer a clue. It’s about a health insurer, not property and casualty, and it may be an isolated incident, but probably not. The names have been changed.

My friend Maria relayed this story about her dental insurer and a claim generated by her college-aged daughter, Sabrina, who was a named dependant on Maria’s policy. Sabrina, home from school for the summer break, went in for her annual teeth cleaning and check-up. She had a couple of cavities that were taken care of by the dentist, who then filed the claim with Maria’s insurer.

Maria subsequently received notice the claim was denied because the insurer had no proof that Sabrina, an over-age dependent by the insurer’s standards, was in fact a full time student. Maria called the insurance company and was instructed to fax the necessary document to a certain person at a certain fax number. She did so the next day.

The dentist submitted the claim again. Several weeks later Maria received another notice that the claim was denied for the reasons noted above. She called the insurer’s customer service office, told her story once again, and explained that she had faxed the document as instructed.

Maria was put on hold. About 10 minutes later, the customer service representative came back online and said the document had been received but had not been properly recorded, although no one knew why. The CSR acknowledged that the insurance company had “dropped the ball.” Maria was told to contact the dentist and have the office file the claim again, for the third time.

Maria objected. “You just told me that your company had ‘dropped the ball’ on this,” Maria said. “Why does my dentist have to re-submit the claim if it’s the company’s, fault?”

“That’s just how it’s done,” the CSR replied. But Maria refused to accept that answer and asked to speak with someone else. The CSR again put Maria on hold. After another long wait the CSR returned to the phone and told Maria that the company would take care of it and the claim would not have to be re-submitted.

So, the $500 claim was to be paid, but at what cost — to Maria and the insurer? Was the missing paperwork an intentional tactic to avoid paying the claim, or was it simply the result of inefficiency? Maria will never know. But she will know that she had to take hours out of several days to deal with a claim for a named insured for whom premiums had been paid and proper paperwork submitted. That’s what she’ll remember from the transaction and that’s what she’ll tell her friends.

And that may be one reason for the perception gap.