We Can Learn Something About Insurance From a Funny Video on Vaping

Do you remember when insurance companies had to make significant reserve adjustments for Asbestos claims in the early 2000s even though the exposure happened years ago? I worked for Hartford at the time, on their investment side, and even though our sales were great, Hartford’s earnings always seemed to disappoint because they kept having to increase the reserves to pay for asbestos exposure claims that were just starting to be filed even though the asbestos exposure may have occurred decades ago. If you look at your insurance policy you might even see an exclusion titled “Absolute Asbestos Exclusion” that makes clear that any new asbestos exposure will not be covered in the future

Insurance policy wording is shaped by claims that have been paid by the insurance company that they never intended or imagined they would be paying. Asbestos is a pefect example of this happening on a catastrophic level. A large number of people were exposed to Asbestos and it took years to realize the damage that asbestos exposure inflicted on the human body. Today, anytime a claim is contested in court and the insurance company loses we can expect to see policy language change so that the insurance company does have to cover similar claim again. The old saying, “fool me once, shame on you, fool me twice, shame on me,” is alive and wellin the insurance world.

Like asbestos, there will always be risks that do not show their ugly head until years after we have been exposed to them, creating challenges for the insurance companies. Insurance companies cannot underwrite and reserve for losses they are not aware of. I tell you all of this for two reasons:

  1. Your insurance policy is always changing, even if your broker tells you there are no changes, things are always changing. It could be as simply as a form being updated to comply with state requirements or it could be the addition of a form or wording that excludes all “claims arising from electronic communication.”
  2. It allows me to share this great video on E-cigarretes I found on Twitter that is a good example of demonstrating that we don’t know always know or understand all the risks that a product might have.

The dude vaping is actually from Barstool Sports and was trolling Laura Ingrahm but the point of unknown risks still prevails.


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