Close the Gap, Win the Client

Jan 18, 2016

  1. GXR2
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    GXR2 Super Genius

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    One way to win clients is to educate them on coverage gaps. I often have potential prospects with property insurance that is full of holes from their previous agent. Do yourself a favor ... if you spend the time and educate your clients on why your policy is better, your retention rate will soar.

    On an HO6 policy the buildings will be covered by the master policy - insurance the board purchases for the entire complex. Depending upon what is written in the HOA documents, and insurance policy this more than likely will ONLY insure the exterior of the unit(s). It is the property owner's responsibility to get adequate interior protection to rebuild from the studs inward.

    For example, on property insurance under an HOA the homeowner could face a sizable assessment for damages not covered by the master policy after a loss. This comes to them in the form of a bill that can not be claimed on their property insurance without loss assessment coverage.

    It is my understanding that loss assessment often comes with a cap of $1,000 or so toward the condo/townhome master policy deductible assessment. This can leave your client with a serious coverage gap even with loss assessment protection is added.

    If they have a loss, the condo/townhome master policy may have a $10K to $50k deductible or more (depending upon property size and values). If a loss occurs this can be split up among the homeowners.

    A greater gap in coverage occurs if a singular homeowner is at fault they most likely will be assessed the full amount.

    Increased building contents coverage endorsement, which is like coverage A on a traditional home, increases coverage to rebuild the interior of the property which isn't covered by most condo/townhome master policies.

    The unsettling part is, that some carriers HO6 policies don't have any interior contents coverage unless the increased building contents coverage endorsement is added. This may be fine if your client's master property insurance will rebuild the whole structure (interior and exterior). If not, and you don't add that endorsement, you have a huge gap in coverage.

    It is VERY important to obtain a copy of your clients HOA master policy to see what type of policy they have (exterior and interior OR exterior only), and the deductible amount. The increased building contents coverage WILL cover the interior rebuild, and I do believe it will pay for assessments from master policy deductibles without a cap.

    For example, if it will cost $50K to rebuild the interior of a condo/townhome, but the master policy has a $25K deductible, increased building contents should be increased to $75K to close the gap. Additionally I add the maximum loss assessment endorsement, which is usually $50k.

    If you're appointed with a carrier that provides an HO6 with guaranteed replacement cost you may be okay. I would still add a generous loss assessment endorsement.

    This is how you win clients based on education and quality not price.

    This is an introduction to my question:

    What are other gaps may exist in auto and property insurance, and what have you done to close those gaps to insure your client(s) are protected better than their previous agent?

    You're doing this, right?
     
    Last edited: Jan 18, 2016
    GXR2, Jan 18, 2016
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  2. HCCIA
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    Also coverage A special coverage and HO 1734- modified unit owners endorsement. It syncs the master deductible. Only available on the iso 2000 edition.
     
    HCCIA, Jan 19, 2016
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  3. insurance1822
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    insurance1822 Guru

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    GXR2 - I'm not buying your sudden subscription to this forum... I think you & I should fight. I think I would win..

    1.) You say the master policy "more then likely" only covers the exterior. In my market, it's "more then likely" that the condo policy is all in. But...yes it's good to consider this.

    2.) Loss assessment coverage? Yes, of course we should be raising that limit. Most start at 1k, but again..of course we raise this. In fact, I don't even discuss this w/ the insured because they're usually idiots. I just include it to cover my butt.

    3.) Most people don't care about the nitty gritty...write the business, insure them correctly & move on
     
  4. GXR2
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    GXR2 Super Genius

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    #1.. I am surprised how many condo owners do not know this! In fact I have had clients tell me the master covers the whole unit. When I read the HOA docs and master policy, not so! Whatever the percentage is in your market you still need to see for yourself what it covers so you can properly insure your client, and get the best rate for them.

    #2 Clients are not idiots. Insurance is confusing and they don't understand it. If you do business in a higher educated market clients may grasp insurance concepts quicker, but it is still confusing to people.

    #3 Maybe in your market, but not mine. Not all clients, but a good majority appreciate knowing that they're well protected. If you're just quoting business without having a conversation, they have no reason to believe your policy is better than the next agent who is cheaper than you. But if that method works for you then so be it. I'm not telling you how to run your business, just saying what has worked for me to retain clients.
     
    Last edited: Jan 20, 2016
    GXR2, Jan 20, 2016
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  5. insurance1822
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    insurance1822 Guru

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    How long have you been in the business?

    Personal lines clients are (mostly..) idiots. All of them.

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    My stance is I won't write less then 100/300 w/ stacked UM/UIM. Once you explain every single coverage in detail, they mull over everything & it complicates the sale. If they opt out of a coverage (even if you get confirmation in writing..) they'll still talk crap when there's a claim & nomatter what...you'll be the bad guy.

    For those who ask the questions? They get answers. Everybody else gets a minimum of 100/300 across the board w/ rental on the auto & some level of water backup on the home.

    I don't give my people a choice. They take what I determine to be 'well above average' coverage (at a minimum) or I just tell them the carrier won't go lower.

    Most don't question me. Most end up w/ way better coverage. When you're doing volume, you don't have the time to sit down & go over everything (trust me.) Those who give push back and say "well I only have 15/30" are let go instantly.

    Churn em...write em...and move on. My way may be unique, but I liken my clients to children & I'm their authoritative parent who'm they know has their best interest at heart...but lays down the law.
     
  6. hesse
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    I kind of agree with INS1822.

    I quote limits im comfortable writing not what the insured requests. Win some lose some not worth the E&O
     
    hesse, Jan 20, 2016
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  7. GXR2
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    GXR2 Super Genius

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    I agree that's what I do. Min 100/300 on auto. Min 300K lib on home. 250/500 if the have money, prestigious career, more assets to protect, etc. If they demand state min I referred it out.

    By having a conversation with the client I didn't mean let them tell you what the want. Not at all. Not all clients need that type of discussion either. Many just want the price. But I do make sure they understand if they're shopping rate to compare apples to apples. Low price from that other guy doesn't assure you have good coverage.

    For the other smaller segment who have assets, good risk, someone I don't want to leave I take the time to point out some of details why my coverage is better. Those usually want that anyway.

    But I agree their aren't enough hours in the day for every client.

    Everyone has a personal brand. I've been very successful building a brand image as an advisor not typical agent and that brings me more upscale clients
     
    Last edited: Jan 20, 2016
    GXR2, Jan 20, 2016
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  8. insurance1822
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    I would rather have 50 median income households then 10 high income households.

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    If you're doing volume, the demographic of your clientele should regress towards the mean...which is median income households.

    If you're doing VOLUME of high income households...please share how. Then again, if you're meeting w/ all them & discussing coverage like you suggest...there wouldn't be time to do volume.

    I've built a reputation as the "go to" for pretty much every local mortgage guy and/or realtor. I also have a reputation of "dude w/ big house & nice cars."

    I know a few guys who like to wear the 'advisor' hat...nice suits & act like we're more sophisticated then we are. We sell home & auto insurance brah..cmon. I make more then all those chumps.

    Go manage money or be an FA if you wanna be a true "advisor" or get into mid to large commercial accounts. Otherwise..you're selling home & auto brah just like the green Gecko.
     
  9. FL P&C Broker
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    FL P&C Broker Guru

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    Agreed. The middle market is where the money is at. The low income typically want state min and the higher income are usually more of a pain in the ass and think they know more than you or that they are invisible and can "self insure."

    Middle market/median are smart enough to care and have the money to pay to protect themselves properly.
     
  10. GXR2
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    Its mostly middle market. Very few wealthy. Many of my middle market clients have assets and want that type of service.

    I agree with you that for the most part it is about volume. Its a numbers game. I get that.

    But within volume based selling there are select clients who need and want more than just a quote and issue salesman. And honestly anyone can do that.

    Clients refer people they know who are like themselves. So my volume type clients refer more of them, my clients who need or want an advisor refer more of that type.

    The latter are much better in terms of account rounding, cross selling, and they're highly faulithful.

    Yes they can be more challenging to deal with, but most of the time it's because they have been screwed by an insurance salesman who didn't give a dam about them.

    The ones who act like know-it-alls, come in every walk of life. There is only so much I will reduce or exclude. If their attitude is such they want bad coverage because they know-it-all and they fight me every step of the way, I won't insure them with bad coverage. There is the door, here is your referal, have a nice day. Move on.
     
    Last edited: Jan 20, 2016
    GXR2, Jan 20, 2016
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