The Equipment Insurers Side of the Story

In our April article "How to Insure Your Dive Equipment," we reported complaints about Dive Equipment Protection Plan (DEPP) and its slow, shoddy handling of complaints. Deane W. Lehrmitt, CEO of Innovation Programs Group, Inc., broker for the DEPP program, contacted us to explain specific claim problems. Regardless, the complaints keep coming in to us from Undercurrent readers.

Linda Rutherford (Montara, CA) has had to re-submit information about her flooded camera twice after DEPP belatedly found her e-mail with the specific details in its spam inbox. Robert O'Donnell (San Diego, CA) says DEPP lost a certified letter he had sent them pertaining to a claim. "They eventually approved my claim, but have never sent me reimbursement checks for the equipment I lost. Moreover, they are not responding to my emails or phone calls. They also double-billed my credit card."

Lehrmitt then sent us a detailed letter to explain why DEPP was having issues, what it was doing to correct them -- and how some of its customers are the real problems. Lehrmitt says tech glitches and moves to new offices have caused problems like those affecting Rutherford and O'Donnell. "We implemented an automated phone system to record incoming calls and route them to the appropriate department. Regrettably, the system has not worked to our satisfaction. The company that installed the system has disbanded, so we are having some difficulty correcting these issues. Then we moved our headquarters in January. We purged some IP addresses that we rarely used. Unbeknownst to me, emails that were supposed to go to me were being kicked back to the sender as undeliverable, making it appear as though we were no longer available. Please address all email to me at dwl@ipginsurance.com."

The second problem DEPP has is the rising cost of covering insurance and claims. "Over the past three years, we have seen our loss ratio (losses versus premiums) jump. Some of the causes are customers insuring only their highervalued items, which has caused the average claim cost to rise, and a significant increase in the number of airline losses (with the TSA restricting locking devices on luggage, thieves have an open season on dive gear located in checked baggage.)"

So how to reverse those trends? Lehrmitt says DEPP polled its customers to ask if a rate increase or limit in coverage would be accepted. Of course, a majority of people said no. So, "if the customer base would not assist in helping control the increasing losses, then it falls upon us to implement corrective actions." DEPP notified every DEPP customer back in August 2010 that it would have to investigate more claims and require additional information, so the claim turnaround time may be extended.

Lehrmitt said that DEPP customers who don't follow instructions cause many headaches. "We receive claim descriptions saying such things as, 'Flooded my camera' or 'Lost a lens,' with no further details. Our underwriter will not accept that generalization, and we are forced to go back to the customer, seek additional information and the process gets longer, and the customer grows more impatient."

DEPP policy states that one must submit claims within 60 days of the incident. "One customer had a claim in February 2010, put us 'on notice' in July 2010 saying only that he had a claim in February. When we requested specifics, he said he would get it to us when he got around to it. He got around to it in December 2010. We had no choice but to deny the claim.

"In addition, many customers send their damaged (especially flooded) items to a repair facility before reporting the incident to us. That is in violation of the policy. We try to work with the customers on this, but we have to seek an exception to the policy and that, too, elongates the process.

Add to that customers who file too many claims. "We have one customer who recently incurred a fifth loss in less than three years. Obviously something is amiss. Is this an incredibly long run of 'bad luck,' or is this simply a careless individual?

Then there are customers who try to slip in a claim for an uncovered item. "One person flooded a dive computer. He has 12 items insured and requested flood coverage on six of those, but not the dive computer. He wants us to ignore the terms and conditions of the policy and cover his claim."

Lehrmitt says DEPP understands customers' frustration, but customers need to follow the rules on the policy they signed. "Without raising rates or restricting coverage, the only productive method available to us is to manage the claim process more closely."