Health, auto, business, liability … the past 12 months have been insurance mayhem for just about everyone everywhere. Even the shrewdest, most farsighted, and most paranoid insurance carriers could not have anticipated a global pandemic with a devastating Texas ice storm chaser. And yet, here we are, with two worst case scenarios simultaneously occurring, leaving individuals, families, and entire communities desperate for the basics: jobs, shelter, heat, water, safety, school, and in-person contact with our loved ones. These unprecedented times (understatement of the century) have left many of us asking: What next?

Calculating what next is what insurers are skilled at. Because at the end of the day, insurance is all about making sure expected losses from the “few” can be covered by premiums from the “many.” Insurance carriers do this by imagining everything that could possibly go wrong and then deciding what they will cover – and in many cases, what they won’t. This mitigation of risk is both an art and a science: cover too little or price too high, consumers won’t buy your product; cover too much or price too low, your business won’t be in business very long.

An Insurance Year Like No Other

COVID-19 has many of us thinking about how comprehensive our health insurance is, but this taking stock should also be applied to life insurance (increasingly written off by younger generations, but a critical safety net ) long-term care (could you afford a financially depleting one to two years in a medical assistance facility?), and property and casualty insurance. Given how differently people are living and working today relative to 2019, it’s time to reassess personal risk. These changed behaviors (e.g., less driving, more working/playing at home) come with a slew of insurance implications. Put in a new trampoline or pool? With this increased risk of injury or damage, you might want to review your homeowners insurance (less is definitely not more, just ask millions of Texans).

Then there are unforeseen extreme weather events in a handful of states that have resulted in a loss of power, water, and gas; a lack of food and heat; some houses catching fire while others have been flooded due to frozen pipes bursting. Those who were properly insured will come out a bit bruised, but still intact. Those who had cut corners on their coverage, or perhaps never bothered with the details of their policies, are now regretting their missteps as they endure significant financial burden to repair and rebuild.

On the business side, could your restaurant, retail store, or other public-facing organization leave you liable for the transmission of Covid-19? What about being shut down for not following code due to failure to keep up with the rapidly changing state guidelines? Traditionally, business continuation insurance has been vital coverage to have in order to protect profits should your operations shut down due to issues like property damage. Many have found that government-mandated closures were unfortunately not a covered event in traditional policies. That said, insurance companies do have products for extreme events (e.g., terrorism) and are already responding with new forms of coverage to account for pandemic risks.

If all of this is depressing , it’s still not too late to prepare for the future, whatever it may hold.

What does contingency planning for the next worst case scenario look like?

If a global pandemic doesn’t highlight the importance of contingency planning for what have traditionally been considered low probability events, I don’t know what will. Here are some ideas on protecting your ass(ets).

For insurance consumers:

1. Take a close look at what life events you’re insured for, including long-term care, life insurance, and flood insurance. Think of it as stocking up on toilet paper during a pandemic, only potentially life-saving and life savings-saving.

2. Review specific coverages such as auto insurance. If you’re driving 80% less due to working at home, you may be able to significantly lower your premium. In the same vein, if you bought a trampoline to entertain the kids, make sure your home insurance policy actually covers it; and if not, look at extended coverage to protect yourself. If the past year has taught us anything, it’s hope for the best – prepare for the worst.

3. Compare insurance policy premiums with sites like Zebra or ValuePenguin. Pro tip: If you’ve been with the same carrier for a while, rates start low at first to attract new customers and then move up slowly over time. By switching to a new carrier, you may be able to save 10-20%.

4. Look at increasing your deductible/s to lower premiums in the short term. Another way to save money is to bundle products with one carrier for discounted rates and/or enroll in automatic payments for further discounts.

For insurance carriers:

1. Consider new kinds of coverage to offer when major events like a pandemic or extreme weather events occur. There may be increased interest in liability coverage for disease transmission or life insurance throughout age bands.

2. Proactively audit coverages and reach out to customers to offer appropriate discounts and suggest coverage additions. By looking out for your customers, you’ll be grooming long-term relationships.

3. Invest in digital interfaces and insights to support better customer experiences. Why? Customers are looking to review their coverages and plan for risks, and yet are also staying away from agent offices. Make it easier by enhancing their ability to review and change policies remotely. It’s also a smart idea to increase data intelligence to identify insurable customer purchase events and to identify when customers might be shopping around.

4. Pursue relationship-deepening efforts with bundled pricing, extending payment plans, and payment fee forgiveness. Also look at setting up automatic payments and discounts for EFT direct debit payments to ensure customers can pay more easily and to increase customer retention. Investing in relationships during these troubled times will payback with increased loyalty over the coming years.

Insurance was created so individuals and businesses can persevere through troubled times and unforeseen events. We are certainly living in unforeseen events now. But it’s an opportunity to revisit the various risks we all face, make concrete plans for protection, and breathe a sigh of relief as we look forward to returning to normal.