Agents are always looking for new prospects. After all, new business and clients are what keeps those sales numbers up, right? While new customers are always a good thing, sometimes, acquiring new clients takes time and in the short-term, will cost more than what they initially bring in. That's why many insurance agencies prefer to keep and retain current clients, upselling them on more services. However, you may think that once your client has life, auto, and homeowners or rental insurance policies with you, they're done, right? Not necessarily. You may find that some of your clients have insurance policy gaps.
Gaps are considered an amount or an event/situation not covered by the policy and your client may not even be aware of them. That's why, aside from a mere upselling opportunity, as an insurance agent, you really need to inform your clients if they are lacking key coverages in their policy. That way, when the time comes and they need their coverage to kick-in, they are fully protected. So, how can you find clients with insurance policy gaps? Read on and consider the following ideas.
Find Policy Holders With Only The Minimum Required Coverage
The easiest way to find out if policy holders have a gap is to determine which of your clients are holding only the minimum required coverage. For example, everyone shoud have auto insurance, since it's the law. Usually, liability and personal injury protection are required, but things like theft, vandalism, falling objects, and natural disasters are not. If your client lives in a risky neighborhood or travels to such areas, then you should recommend they upgrade to a more comprehensive policy. That way, should any of these disasters strike, they will get ample compensation.
Ask if Homeowners Have Made any Recent Improvements
Improvements like a pool, deck, or an additional room can have a positive effect on a home's value, but it also means that owners need to think about filling the holes in their homeowner's insurance policy gaps. After all, since these additions add value to a home, coverage from insurance may not be enough anymore. A study by Marshall & Swift/Boeckh (MSB) found that as much as 60% of homes in America are undervalued.
So, ask your clients who have home insurance if they have recently made any additions at home, or maybe they might have mentioned it to you. They might not be aware that when their home's value goes up, then they need to adjust their coverage to plug in any insurance policy gaps.
Make a Note of Clients Who Have Major Life Events
For many of us, our clients aren't just customers, but our friends and even family. That's why you'll probably know about any major life events they're going through or maybe even see it on Facebook. While these life events are exciting, they can also mean bigger insurance policy gaps. Getting married, having a baby, new job, promotions, and even moving to a bigger house - these are just some amazing life events that do affect insurance coverage. For example, having a child will definitely increase a household's expenses or some may even lose a source of income if either parent decides to stay at home. That means that if anything happens to the primary breadwinner, his or her life insurance policy needs to be able to provide enough income to support the entire family.
When you think of major life changes, you can also think more outside the box. Another example is having new teen drivers at home. Tell your clients about this sobering statistic from the CDC: "...per mile driven, teen drivers ages 16 to 19 are nearly three times more likely than drivers aged 20 and older to be in a fatal crash." That's why many insurance companies urge parents to notify them once they have a new driver at home. Adding a teen driver may increase premiums, but it's often cheaper than having the risky driver get insurance of his or her own.
Inquire About New "Toys"
Everyone needs hobbies, right? Whether it's a new jet ski or priceless antiques, these "toys" may suddenly create insurance policy gaps for your clients. Take for example homeowners insurance. The most basic policies will cover art and jewelry, but most will only cover up to $2500. Depending on the type of jewelry, this may not be enough. And many policies may not even cover certain types of expensive "toys" like rare comic books and sports memorabilia. If these items are lost in a fire, stolen, or damaged, the homeowner may not have a recourse because of the insurance policy gap. So, if you know a client who has expensive hobbies, try to ask them if they have thought about insuring their toys or if they even know they may not be covered by homeowners insurance.
Insurance policy gaps are no joke. If clients aren't aware they have gaps, then they might go about their daily life, thinkng that their policies are going to protect them when the need arises. By the time they do become aware of such gaps, it may be too late. As an insurance agent, it's your duty to ensure your clients are well-protected and covered by their policies. That means taking a proactive role in finding lapses in policies and alerting them about it. And it's not just about upselling or increasing premiums, but becoming an educator and friend to each and every one of your clients..