Your Insurance Customers: What Do They Know About Their Insurance?

Your Insurance Customers: What Do They Know About Their Insurance?

Do your insurance clients feel like they could pass Insurance 101? Probably not: a lot of them may have some quiet confusion about their insurance policies. This confusion causes your clients to seek out the wrong coverage or inadequate coverage. What are some common misunderstandings that clients have about their insurance policies? 

1. If There's Water Damage, Insurance Will Cover It 

Unfortunately, this one can be an expensive mistake. While insurance policies could cover a pipe leak inside the home, they may not cover overland flooding or problems caused by a chronic failure to maintain the property over time. Make sure that your clients know that they're responsible for maintenance and that certain disasters may require additional insurance.

2. My Insurance Protects My Valuables 

Your clients get insurance to protect their properties and vehicles, but they also get insurance to protect what's inside. If you have a client with a vintage doll collection or a jewelry-making hobby, make sure that they know that these items may exceed the value of specific areas of their home insurance policy. They may need to purchase additional insurance depending on the value of the items that they collect.

3. My Home Renovations Are Secure Under My Insurance Policy 

Are your clients renovating a home? According to the Insurance Journal, many people insure based on the market value of their home rather than buying "coverage based on a home’s cost to reconstruct." If so, you need to make sure that they tell you about the changes to the home so that their upgrades are covered by their insurance policy. They will be upset if their new dishwasher causes flooding in the kitchen and their newly-installed floors and cupboards are damaged. They'll be doubly upset if they learn that their high-end updates are not covered by their insurance. When your clients renew, ask them if there have been any home updates. 

4. My Friends Can Borrow My Car

Yes, your clients' friends can borrow the car, but your clients may not realize that they'll be responsible for the damage. Make sure that they have an understanding of who's covered and who's responsible for their car insurance.

5. I Have Comprehensive Car Insurance: I'll Be Fine 

Comprehensive insurance sounds like it should cover everything. Unfortunately, it isn't as comprehensive as it sounds. It covers theft, vandalism, and damage from storms and animals. Make sure that your clients know what is actually included in their insurance policy.

Get Insurance In Case Communication Fails 

As part of your insurance marketing, strive to educate customers about the realities of their home insurance. You can position yourself as a resource person who gives your clients a balanced and simple look at the strengths and gaps in their insurance policies.

Unfortunately, in spite of your best efforts, your clients may not completely understand their insurance policy. If they do make a claim, they could be sorely disappointed to learn that their insurance is not what they expected. This can lead to customer complaints and could even lead to a lawsuit if your customers feel that you did not provide them with the right information or enough information about insurance products. 

As an insurance agency, your job is to not only provide insurance but to educate your customers through insurance marketing and customer service. You should also make sure that you hold E&O insurance even if you pride yourselves on excellent communication, just in case your customers feel that a misunderstanding has led to financial harm. 

As an insurance agency, you need to think about so many different aspects of your business. You have to hire the right staff, sell the right products, and work well with your customers. Take one worry off your plate: protect yourself with E&O insurance so that if your communication strategies fail or your customers are unhappy, you have a backup plan that will save your insurance agency money. Contact American Agents Alliance today to learn more about our E&O insurance and other products and programs that we offer your independent insurance business.

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