The relationship between an insurance agent and a client is a two-way street. When we talk with clients trying to determine if they want us to handle their insurance program, we are interviewing them as well. In my humble opinion, too many clients think insurance agents want to write every piece of business available and that we should be thankful for every call regardless of how last minute it is. The truth is professional agents who conduct business wisely are as selective about their clients as the clients are about them.
We, as agents, understand the importance of insurance because we have seen the terrible results of not being protected. As they say, “you can’t make this stuff up!” I don’t have to make up stories. I get stories every day in my agency. Accidents happen and change lives forever. What makes the conversation about coverage and premium difficult for insurance agents is that the difference between good coverage and bad coverage is usually only a few dollars. Seeing people make bad decisions due to an extra $20 a month is tough. As my good friend, Tammy White, says,“ Penny wise, pound foolish.”
The best insurance agents will complete a thorough review and recommend appropriate coverage because they care. If an agent simply takes an order, copies your current coverage, and doesn’t ask questions, they are not invested in you. Remember, a good local agent will be out in the community. You may see them at the grocery store, church, school activities, restaurants or other local places. Do you think we want to face you in a situation where you have a claim and do not have enough coverage? We want to be liked at claim time.
The 7 Things
- Waiting until the last moment to shop your insurance. Part of our selection process as insurance agents is how prepared a client is when they call or meet with us. As a client, you don’t need to know everything about insurance (most know very little, like me before I became an agent) but you do need to be responsible with your insurance program. What do I mean by that? If a client calls the day before policy renewal, that’s one strike against them in our agency. Companies send renewal notices at least 30 days in advance. If a client delays getting a proposal until one day before renewal, this is a red flag for an agent. It never fails that these same clients expect a proposal sent to them immediately! One of my favorite sayings is, “Your lack of preparation does not create an emergency for me.” That might sound harsh, but last-minute requests come with consequences. For example, one issue with waiting until the day before your policy renews is that you miss the early proposal discount that most companies offer.
- Buying a car and neglecting to notify your agent in advance, so they can send the proper paperwork to the dealer. I can’t tell you how many calls I get on Friday night or Saturday because someone does not have the necessary paperwork to leave the dealership. If you know you are looking to purchase a car, call your agent. They can send a current I.D. card for you. Policies in Tennessee can vary per vehicle acquisition, but the Insurance Services Organization (ISO) states you have 14 days to add a new car to your policy if you have comprehensive or collision coverage or only 4 days if you don’t carry comprehensive or collision. The only problem with this is that most dealers will not let you leave the dealership without written verification of coverage.
- Not understanding the importance of providing detailed information about your situation. Why do you need all that information, can’t you just give me a proposal? As agents, we have an obligation to the companies we represent to provide correct information on each risk. These companies need certain information to properly rate your situation and make certain you are properly protected. That means a good agent asks a LOT of questions. Remember, we are the ones who know insurance and the limits or coverages provided by different policies. I’ve actually had prospects say, “Can you hurry up? Why do I have to answer all these questions? Can you just give me a proposal?” Does it make any sense to you that when purchasing the biggest asset (home) in your life, not to take the time to make certain it is properly protected? Clients who can’t provide detailed information about their particular situation, are not the type of clients we can help.
- “I haven’t had any tickets or accidents in the last 5 years.” When looking at auto insurance, most companies run motor vehicle reports which shows tickets and accidents in all states and a CLUE report which shows all claims paid by previous insurance companies for the last 7 years. When I complete a preliminary review with a client, I ask the question, “have you had any tickets or accidents in the last 5 years?” I wish I had a dollar for every time I’ve received incorrect information from the client. It is amazing how we put these items out of our memories! I understand if you can’t remember something that happened 5 years ago, but I’ve had people forget tickets that occurred 3 months prior! Oh, by the way, there is a difference in premium at that time!
- Buying a car and complaining about the insurance cost for your youthful driver AFTER the purchase. Youthful drivers are inexperienced and therefore prone to accidents. The premium for youthful drivers can be painful for parents. I usually advise to purchase an older car and not include collision coverage. Deleting collision can save a $500 or more per year on a youthful driver. Would you like to guess how many clients go buy a higher rated car and then get angry with me about the insurance premium? With some planning, this shock can be avoided! Do your insurance shopping BEFORE you purchase a new car for your teenage driver. Call your agent and price several vehicles before you purchase. High performance vehicles or SUVs are going to be outrageous for a youthful driver, and you won’t see a reduction in premium until they are 25.
- My mortgage banker said the premium should not be that high. My first response here is, “when did your mortgage officer get their insurance license?” So many factors are used to determine an insurance premium; there is no way to predict a premium. I represent 7 major companies, and all of them have different formulas to determine their premium. I would not dare to guess at a premium, yet mortgage brokers do this frequently. I have several good friends in the mortgage business. When I get their statements on insurance premiums, I ask them if I can tell them what the interest rate should be on this loan? Major issues driving a higher premium could be previous claims, location of the property relative to the fire department, dogs, scheduled items, the client’s insurance score, or many other factors the mortgage person knows absolutely nothing about!
- The answer to this question, “What type of dog do you have?” According to the 2019-2020 American Pet Products Association National Pet Owners Survey 84.9 million families own a pet, and 63.4 million households own a dog. As agents, we always have to ask about your favorite pet. You won’t find a bigger dog lover than me (see one of my favorites below), but insurance companies have underwriting rules regarding certain breeds of dogs for good reason.
Home insurers paid out $675 million in liability claims related to dog bites and other dog-related injuries in 2018, according to the Insurance Information Institute (I.I.I.). Liability claims for dog-related injuries rose to an estimated 18,522 incidents in 2017 with an average liability claim payout for a dog-related injury of $37,051. While the number of dog bite claims decreased to 17,297 in 2018, the average cost paid for dog bite claims rose 5.3% to $39,017. Claim costs are trending upward because of increased medical costs coupled with larger settlements and jury awards to plaintiffs.
Back to the misleading answers from clients. One of the most forbidden dogs in insurance terms is the American Staffordshire Terrier more commonly known as the pit bull. During our underwriting meeting with clients, I always ask if they own a dog. When they say yes without naming the dog’s breed, I instantly become more curious about the dog. If I get an official breed name of a dog instead of pit bull, I know we are discussing an aggressive breed. You may have a beautiful, sweet pit bull, but it is still a pit bull. Everyone, including me, thinks their dog is the best—most lovable dog ever. Insurance, on the other hand, is a game of numbers, and insurance companies know the chances for a pit bull to be aggressive are greater than for other dogs. A few companies will write the higher liability breed of dogs, but you should be honest with your insurance agent before a policy is issued.
The relationship between an insurance agent and you, the client, is a two-way street. It should be a relationship built on respect and trust. Now that you know some of things that negatively affects your insurance agent, you can avoid them. Just for the record, insurance agents are human too. We don’t like paying premiums either, but we understand the importance of proper coverage. Remember, be prepared early!