Incentivizing Risk Management: How Are Insurance Companies Rewarding Their Customers for Having Good Practices in Place?

By Zubko, Nick | Behavioral Healthcare Executive, September 2011 | Go to article overview

Incentivizing Risk Management: How Are Insurance Companies Rewarding Their Customers for Having Good Practices in Place?


Zubko, Nick, Behavioral Healthcare Executive


It's a simple principle--if bad behavior is punished, then good behavior should be rewarded. When it comes to insurance, behavioral healthcare providers can demonstrate "good behavior" by implementing practices and policies that avoid most of the unwanted risk posed to their patients, physicians, staff, and the facility as a whole. With that idea in mind, we asked two insurance providers, NSM Insurance, and Irwin Siegel Agency, Inc., to explain how their "well-performing" customers are rewarded for their efforts.

NSM Insurance

As a "specialty program", NSM Insurance Group's Addiction Treatment Providers Insurance Program differentiates itself by offering unique and comprehensive coverage for a broad range of behavioral healthcare facilities. Specialty commercial programs are not "commodity" insurance products such as personal auto, homeowners', or workers' compensation insurance.

According to NSM, not all insurance companies understand the unique exposures and claims facing the behavioral healthcare industry, and design products to properly insure them. That said, the company recognizes and rewards insured customers who practice good risk management and "perform well" with respect to their claim experience.

Where personal auto and homeowner's offer multi-policy discounts, the company also offers what are referred to as "package credits" for customers who place multiple lines of coverage in our program. Many personal lines insurers offer discounts for college degrees and other educational achievements and memberships.

NSM Insurance also offers premium credits for behavioral health industry accreditations and membership in educational associations. Most home owners'. policies include discounts for home in alarm systems and other protective systems. The company also offer discounts for sprinkler systems, burglar alarms, and similar protective devices and systems.

[ILLUSTRATION OMITTED]

One of the most common and significant premium discounts offered by personal auto insurers and worker's compensation insurers is a good driving or good claim experience discount. NSM provides significant premium discounts for our insured customers with good claims experience. …

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