4 ways to help homeowners avoid insurance claims
Agents can use this information to help clients navigate risks — and handle the ones they can't prevent.
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Independent agencies have a competitive edge: We can build great relationships with our clients by providing them different options.
In my agency, it’s the No. 1 job for everyone to kick-off a relationship of trust and empathy with every client and prospect. We start with a 15-minute interview to gather valuable information, and then we move on to offering choices of coverage and carriers. The biggest advantage of independent agencies is that we get to make recommendations for our clients based on their needs, not place them with a specific carrier because we don’t have more options.
We utilize all available resources and dedicate time to our clients, and this helps us build a long and lasting relationship. We like to offer them as much value as possible, and we mix insurance with regular daily living activities to build a foundation of trust. I understand the advances in technology and how they have changed our industry; however, we use technology to our customers’ advantage to save them time and let them focus on the things that matter most for them.
I’m a true believer in insurance education, and I have invested a lot to make sure we can provide our clients with the best insurance programs. A great program I use is the “Certified Professional Insurance Agent” designation, also known as CPIA, from AIMS Society (American Insurance Marketing and Sales).
One principle from the CPIA insurance success course is “win by price, lose by price.” That philosophy aligns with our agency’s culture. Even though we work extremely hard to get our clients the best rate and price for their insurance program, unfortunately, it’s not always possible. All clients are unique and special in their own way, and they all have different needs on their homeowner’s policies. This is why we like to evaluate each case individually and take the time needed to assess our client’s needs.
I love insurance and risk management, and I feel blessed and motivated every day because, as insurance professionals, we get to help people protect their assets. When working with a homeowners insurance prospect, we always ask simple questions, such as:
- Do you have a pool?
- Do you have a trampoline?
- Are there any underage drivers in the household?
- Do you have any pets?
- Do you any opening protection?
These questions help us get to know our prospects better, understand their risk and needs, and provide them with appropriate recommendations. The answers also will give us insights into what’s important for the customer as we carry our relationship forward, always looking at the long term rather than the short sale.
As part of that relationship, my agency provides valuable information to homeowners’ customers throughout the year. We like to send them information about how to prevent insurance claims, how to recover from them, how to prepare for a disaster, and how to recover from those claims that they can’t avoid.
Here are four ways we do that:
1. Make sure clients know their HO coverages — and their responsibilities.
Educating customers about their homeowners’ coverage is vital before and after the sale. This fights the misconceptions about what a homeowners policy covers. It’s our job, as agents, to help them understand what’s covered and clarify any doubt or concern regarding their coverages. Of course, it is important for us to know our carriers, as well, because some like to add or limit coverages through different endorsements.
At the same time, it’s essential for an agent to make an insured aware of his or her responsibilities in the event of an HO claim since they can be very significant. Primarily, a homeowner must make the carrier or agency aware of any loss as soon as possible. Also, the homeowner must take all the necessary steps to protect the property from further damage. These are important policy conditions that we need to help our clients understand.
In Puerto Rico, during the devastating Hurricane Maria in September 2017, we went through hundreds of homeowners claims. This has helped us gain experience to reinforce more clients’ processes and claims handling during a catastrophe. When facing a disaster, it is tough to remember everything we must do. This is why we also use social media as a great tool of communication to help our clients be prepared and understand their responsibilities if a disaster occurs.
2. Make sure to give information and recommendations after the sale.
After my agency issues a policy, we contact the customer anywhere from four to ten times throughout the year. We cover topics such as policy information, setting up a home inventory, fire safety, and hurricane information. We also provide relevant consumer and public information from local and federal agencies.
In addition, my agencies use materials from different industry organizations such as The National Association of Professional Insurance Agents (PIA National), the Professional Insurance Agents of Puerto Rico & The Caribbean (PIA of PRC), the American Insurance Marketing and Sales Society (AIMS Society), and other resources that are available. Being an active member of the insurance community is a priority for me because it provides value and more information to our clients.
3. If it rains, it floods.
Flood risk is high in Puerto Rico and Florida. No question those areas are basically “hurricane alleyways.” Still, homeowners often balk at buying flood insurance even after we tell them flood coverage is not included in their HO policy. Unfortunately, most of the time, we can’t get prepared for a flood as we do for a hurricane, which is one of the main reasons every homeowner should have a flood policy.
When we talk with a client about this, I simply try to explain to them in a very professional, empathic way something like: “Does it rain every once in a while where you live? If so, then you definitely need flood insurance.”
We then try to explain and help them understand that flooding is probably a much bigger risk than a fire or hurricane. This is something I try to encourage other agencies to do when I teach CE courses. If clients start to hear from their agents the importance of flood insurance, it will eventually become a “well-known risk,” and people will be more conscious about it.
4. Little claims get big.
A common theft can occur when customers leave a purse or wallet in a grocery store cart. When they step away temporarily, their property is a target for thieves, whether they’re inside the store doing their shopping or outside loading their vehicle.
Recently, in a neighborhood we serve, during a three-month period, my agency had two or three claims per month like this. It’s inconvenient and costly to lose a wallet, given the driver’s license, credit cards, and other important documents that are in them. Typically, this theft is covered under a homeowner’s policy, but with a $500, or other value, deductible.
What can be even more costly are expensive items such as prescription glasses or sunglasses, key chains, and the purse itself. My agency recently had a $6,000 claim for brand-name sunglasses, brand-name purse and wallets, and other items inside our client’s handbag. It’s not unusual for a claim to hit $1,000 to $2,000 after the deductible.
One important thing we like to recommend our homeowner customers is to schedule expensive purses, jewelry, and any other high-value items on their policy. The best thing is that when scheduling items in a homeowners policy, you usually have no deductible, and you gain worldwide coverage.
More importantly, at the time of a loss, you get to have a “comparable” price on the item, and the adjuster will go back to underwriting to look for those documents. From there, they do their own appraisal and come back with an offer. It usually is the same price as the receipt or assessment, but in some instances, it can vary depending on the item.
People tend to think of a homeowner’s policy as something you must buy to comply with their loan. When, in reality, this policy is very powerful, and it could literally save them their life. This is why, when working with homeowners insurance, it is important that agents get all the details with the client.
Ariel Rivera, MBA, CIC, CPIA, is the founder of Ariel Rivera & Asociados Inc., an independent insurance agency in San Juan, Puerto Rico, and founder of Deer Insurance Agency, LLC, an independent insurance agency in Jacksonville, Fla. Ariel is a board member of AIMS (American Insurance Marketing and Sales) Society, a nonprofit association that delivers training, information, and networking to increase the personal and agency sales production of property and casualty insurance agents. The opinions expressed here are the author’s own.
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