That fine print: it's so small that your insurance clients don't always bother reading it, or it's on the computer where they scroll blithely through, not worrying about the details. However, the important parts of an insurance policy are often in those details. How can you make your clients more aware of the fine print and how it impacts their security?
Understand Your Client's Situation
When it comes to health insurance, Springbuk states that "The most successful brokers tailor their solutions to each individual client, based on that client’s specific needs." However, this advice is relevant to other insurance products as well. When you sit down with a client, your job isn't to sell insurance: it's to understand your client so that you can find the insurance that's the best match for them. This means that you need to dig into the fine print with your clients to make sure that your clients are getting the product that is the right fit.
Don't Pull Punches When it Comes to the Importance of Insurance
When your insurance clients are debating whether they want to increase their insurance or add a specific type of insurance policy, make sure that they know what is and is not covered by their insurance. For instance, do they know that their life insurance does not cover critical illness? Do they realize that there are limits to specific categories in their homeowners' insurance policy? Make sure that your clients really understand what they're signing up for and how important it is to have the right amount of coverage for their family's needs.
Talk About Limits and Alternatives
Insurance clients may not be familiar with all of the ins and outs of a particular type of insurance. It's your job to explain these details to them. For instance, they may not realize that their homeowners' insurance policy does not cover damage from flooding or will not cover them if a water main breaks in the street and damages their home foundation. If there is a specific exclusion in the policy, be sure to mention this as it could impact what extra insurance your clients choose to purchase.
Examples of auto insurance discussion items could include liability insurance, PIP insurance, collision, medical payments, comprehensive insurance, underinsured motorists, and other activities that could occur after a collision, such as towing. Not every insurance policy covers each of these areas, and your clients need to know what their insurance covers before they find themselves in a position where they need to use it.
It can be difficult for your clients to understand the meaning of the limits on their insurance paperwork. Again, that's where you come in. For instance, if a client has a bodily injury limit of 100/300 on their auto insurance, according to InsuredCo, "The most the policy will pay is $100,000 per person up to $300,000 per accident…. However, if you have lower liability limits like 25/50 and the person has $100,000 in injuries, the company will pay $25,000 and you are responsible for the remaining $75,000." Your clients don't always understand these numbers. Your job is to make sure that they have enough insurance.
Make Sure You're Covered: E&O Insurance
What happens if your insurance clients fail to read the fine print or don't understand the details of their policy, in spite of your best efforts? They could have a problem with their policy later on, and this could lead to trouble in your insurance agency. For instance, if an insurance client feels that her family jewelry collection is covered, but she hasn't looked closely enough at the limits of the policy, she could be upset if it is stolen or damaged. A client who feels that you made an error or omission in an insurance policy could take your agency to court, even if you don't think that you're at fault. Avoid the financial concerns that could ensue by getting E&O insurance to fund legal counsel and any settlements.
At American Agents Alliance, we want to help you be a stronger insurance agency. Visit our website to learn more about the services we offer independent insurance agencies, and learn about our many resources, including discounted E&O insurance.