Stop trying to sell more policies and look at how to sell more premium in the policies you already have
WHAT IS INSURANCE?
Let's be honest here; most of the clients we service think insurance is intended to fix their car or someone else's car in the event of an accident. Or, they think that insurance is there to fix their house is a tree falls on it during a storm. This is the absolute definition of oversimplifying insurance.
So, what is insurance? Insurance is a risk management calculation that assigns a rating to clients that equates to a dollar figure that ultimately transfers the risk form the client to the carrier in the event of a loss.
Sounds fancy; right? But, if you try to explain insurance like that to a client they are going to tune you by the third word.
So, how do we explain it and can the explanation really help increase my premium?
START WITH WHAT INSURANCE REALLY DOES
At the core, insurance is in place to protect a client's financial future. Insurance, by definition is not in place to repair a home or vehicle. This is a misconception that has been allowed to circulate among the common client for far too long.
We need to change the way our clients view the benefit of their policies.
Insurance at its core protects clients from unexpected financial hardship. Think about that for a second. If a client hits another vehicle on the road then that vehicle owner will want compensated for the accident. These compensations are typically resolved by repairing the car and in some cases paying for medical damages. What happens if there was no insurance in place?
It is simple. The car would still need repaired and that repair cost would be expected to be covered by the person at fault in the accident.
What is the cost of a Ford F150? Can you client afford to pay that if they total one on their way home from work today?
You see, this is what insurance actually does. Insurance takes the financial risk away from the client and places it in a large pool of money. Sure, we are still oversimplifying insurance but I hope by now you are beginning to understand how the common client may not have a grasp on the reality of "being sold insurance" and they are bitter at the fact insurance is required by law - with no choice to opt-out.
HOW DO I USE THIS TO SELL MORE PREMIUM?
It is simple. When you are talking to your clients simply paint a picture using their actual coverage limits. (I am not the biggest fan of role playing in an office - but to some degree it helps). Lets look at an example client and see if we can explain his policy in a way that will help us increase our annual premium without much "work"
Client Name: JOHN
Current Limits: 25/50/25
COMP + COL Deductible: $500
This should be enough basic information to do a policy review and explain to John that he may have a gap in what he THINKS is his coverage. For example, when agents add comp + col to a policy the clients sees this as "full coverage" but there is no such thing. There is no such insurance policy that has you fully covered - this is a marketing tactic. BI + PD + COMP + COL would be still LIMITED to the limits of coverage and not cover everything in FULL.
Explaining to John that he has a limited policy may create some panic because of what he has assumed for years; however, it is a good starting point to break the ice on a conversation about adding coverages or changing limits.
Also, the property damage portion of his policy is only $25,000 and John may not understand that this will be used to not only fix cars that he damages but it will also be used to repair fences, utility poles, or other physical property that is damaged.
A 2017 Ford F 150 has an average value TODAY of $31,000
John, our client, now knows that his "full coverage policy" has a limit that will not cover the cost of truck that he may hit on his commute to work; let alone the cost of any additional property damage. And, I know, I know - increasing his property damage from $25,000 to $50,000 will only change his policy a few dollars per year or at best a dollar or two a month. So, why did we not do it to begin with?
Were we so focused on being the cheapest rate we forgot to consult the client?
What about the liability limits? Will $25,000 cover a broken arm and fractured leg? Will this cover compensation for weeks or months of missed work? Will this be enough to cover the medical expenses of the doctor we may injure on our drive home this evening?
I hope you can see where I am going with this. As insurance professionals it is our job to ensure that we have insured our clients to meet their individual needs.
SO DID WE MAKE MORE MONEY?
Using this method, we can increase our book of business by substantial amounts at each renewal. This also gives us the talking points needed for bringing up homeowners changes, umbrella policies, and even life insurance.
Using this talking point and explanation of insurance we can begin to combine it with automatic email campaigns, direct marketing, and other advertising channels to create business within our existing business.
Plus, this method of customer service will also generate referrals and positive feedback among members of your local community.
LOOK AT YOUR BOOK OF BUSINESS TODAY
Look at your reports. Look at your book. How many state minimum policies do you have? How many monoline policies do you have? How many clients do you have with minimum level coverages but they live in affluent neighborhoods? How many clients do you have that have minimum policy limits but own multiple assets with no liens?
These are the reports and data you need to be looking at. These are the clients that can help you significantly increase your book value and generate referrals. Also, using the EIA access you can broker the clients away from their traditional carriers and place them with cost effective carriers while increasing limits.