A lot can happen in a year. Children come of age and move out, old cars are traded in for new models, and the odd impulse buy means the garage now has a few extra “toys” crammed inside. Those are some of the reasons why it is important to conduct policy reviews with your home insurance clients.
Some policyholders rarely talk to their insurance agents after the policy has been put in place. Any interaction they do have with their agent generally revolves around things like payments, bills, or claims. A policy review session is a chance to at least have a positive conversation with your clients.
But perhaps, more importantly, it is also an opportunity to make sure that the policy still provides adequate coverage. All the client’s critical information needs to be kept up to date. However, it is not uncommon for some people to go several years without so much as a cursory glance at their policy. As an agent, you should encourage your clients to undertake a review at least annually.
There are a few important things for you to consider when conducting homeowners insurance policy reviews.
For most people, things like name, address, and contact information will not change very often. Nevertheless, it is a good idea to confirm with the client that all the information you have on file is still correct. Sometimes, a small change might make a significant difference, but in the mind of the policyholder, the change might not seem important enough to affect their policy.
Small changes, such as telephone numbers, often don’t affect the insurance policy per se. Such details are just important if you need to get in touch with the client. But, a name change would be vitally important. If for example, your client got married, that might mean a change to their surname.
That small change could have a significant impact on their policy. It would be necessary to update the policy immediately. The client might not even remember to mention the change of name upfront. You need to ask open-ended questions, such as “have there been any changes in circumstances over the past year” and listen for certain keywords, like the obvious one “marriage.” That would alert you to a possible name change, or perhaps a new addition to the household.
Few people make it through an entire year without adding something new to their life. Those new additions will often come in the form of expensive new toys, property extensions, or new installations. Whatever the case, the home owner’s insurance policy will need to be updated.
In some states, things like boats, snowmobiles, and motorcycles are covered by homeowners insurance. If your client added any of these toys to their inventory in the past year, it would be a good idea to add it to the policy. Likewise, the installation of a new roof or the addition of a patio would need to be mentioned on the policy.
Some additions can even help reduce insurance premiums. If for example, the client installed an alarm system or new deadbolt locks, the insurance company is likely to offer discounts for those changes.
If there is one reason your clients will feel motivated to partake in an annual policy review, it will be because of the potential to save money. It is no secret that home insurance premiums are constantly on the rise, particularly in disaster-prone areas. Homeowners everywhere are always on the lookout for ways they can pay less for their insurance.
A review can highlight important ways a person may save money on their premiums. For example, a new high-tech security system might trigger discounts from the insurance carrier because the client has taken steps to make their house more secure. Also, the overall costs of insurance might be reduced if the client has other insurance packages from the same carrier – i.e. car insurance.
Some carriers offer loyalty and non-claim incentives, too. That means, if you have a client that has been with the same insurer for a certain length of time, and they have not made a claim during that time, they might be eligible for discounts.
That impulse buy at the department store sale, or the beautiful birthday gift might well be overlooked when it comes to home insurance. Policies usually provide coverage for the home as well as belongings. But, it is important for clients to provide a fresh estimate of the valuables inside their home on a regular basis.
Additional coverage might be required to cover a new piece of jewelry your client received for their birthday. Or, perhaps, they purchased an expensive set of golf clubs for their favorite new hobby. Those items might require additional coverage, and your client will need to consider extending the protection to these valuable items.
There is a vast array of options to consider when it comes to deductibles. That often means confusion and frustration among insurance clients. Choosing the right plan at the start is important, but it is also important that your clients understand deductibles do not stay the same forever.
In recent years, many insurers started shifting deductibles from set dollar amounts to percentages.
The change could represent a substantial difference for some of your clients. The new form of deductibles will be a percentage of the insured value of the person’s home, not the cost of having something fixed. That means, a 5% deductible on a $500,000 home, might be too costly for some people. They might need to consider other options.
Homeowners should review their insurance policies regularly. However, many do not. As an agent, you can take the initiative and be proactive in helping your clients maintain adequate coverage from their policies. The review process should not take long at all. For most clients, a thirty-minute meeting will suffice. The benefits to both agent and client, will often far exceed the time invested.