So, what exactly is twistering in automobile insurance? When is it legal? Is twisting within automobile insurance a secret? The short answer is yes and no.
First, twistering is not a legal practice; however, many individuals believe so. Many agents do not offer this type of coverage because they feel it is a competition tactic. As a result, they will attempt to keep their client from finding out about this type of policy. While this may be true in some situations, most agents are legally required to offer certain types of coverage, and if they do not have it, they must either drop the policy or explain the circumstances to the client.
Second, twistering within auto insurance is not a secret. Most consumers have never heard of it, but many other individuals have found themselves the victim. For instance, say you have a vehicle that has some minor cosmetic damage. Instead of repairing the damage yourself at your expense, you decide to contact a local auto body repair shop and have them perform an estimate on the repair cost. In exchange for this estimate, you must agree to pay a deductible on your car insurance policy. If you were to accept the estimate without making the deductible payment, the shop would not count this amount as a credit against your policy, thus negating the entire purpose of purchasing the policy in the first place.
These are just two examples of the problem known as "culling." In many instances, car insurance agents twist the policy's language to get additional payouts from the insured. In addition, many representatives twist the law to the insurer's advantage by creating a loophole that benefits the insurer. These tactics, once exploited, can cost hundreds of thousands of dollars in consumer damages and legal fees. Many people have been injured and sometimes killed as a result of TWISTING IN INSURANCE.
One of the ways that an agent can make their intentions clear is by using terms like "culling" or "twisting." While these terms sound harmless, they often refer to a practice where the life insurance company, instead of acting promptly and accurately, arbitrarily decides to drop your case. The classic example is a company that sell term life policies, sees a customer who has a large balance owing on his policy and decides to drop the account. After months of paying the large debt, the customer is suddenly told that his policy will no longer cover him because the company has chosen to sell it to another buyer.
Other ways that agents can use terms like "culling" and "twisting" are to suggest that the customer's policy was "culled" because he was deemed unprofitable. An example of this might be when an agent says that you can no longer purchase a policy after filing for bankruptcy. This is simply untrue; no bankruptcy is ever announced or filed. As is true with many words used in the legal system, the meaning of "culling" has a "notation" attached to it. It conveys a negative meaning to the company or agent making the suggestion.
Another way that twisting can occur is when an agent contacts a potential customer on their own, without the knowledge of the insurance agent or even the client. Unsolicited phone calls, emails, or letters are all unethical ways of marketing insurance. These types of activities may constitute the most insidious form of marketing an insurance product.
Insurance companies need to have rules and regulations in place to mitigate the possibility that their agents will be found guilty of insurance twisting. The easiest way for them to do this is to employ internal controls and mechanisms to ensure that these incidents do not occur. Internal controls can involve anything from auditing potential customers' application process to using a customer review board to help screen applicants. Another way to implement controls is to make sure that all advertising is honest and completely truthful. Deceptive advertising can create a huge problem for the company and the consumer. A company may avoid serious legal actions by adhering to some rule of thumb like "honesty is golden".
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