Here’s What Your Clients Think Their Homeowner’s Insurance Covers

Here’s What Your Clients Think Their Homeowner’s Insurance Covers

Tuesday, April 18, 2017/News

First, the good news: independent insurance agents are in demand. The 2016 Consumer Insurance Survey from the Insurance Information Institute shows that 29 percent of consumers prefer talking to an insurance agent when they compare Homeowner's Insurance policies. That puts you ahead of comparing quotes online (17 percent) and by phone (24 percent).

Unfortunately, the survey notes only 44 percent of homeowners compare policies when their expiration date rolls around. That's bad news for you because it limits your ability to satisfy your clients. But it may be bad news for consumers, too. According to that same report, some homeowners think their policies cover more than they actually do. Let's take a look at some of the gaps policyholders may not be aware of.

Homeowner's Insurance Gaps That Surprised Insureds

I.I.I.'s survey shows that many policyholders have a handle on the basics of Homeowner's Insurance. For instance, they usually know that their policy covers fire, hail, and wind damage. But some insured think they have coverage for events that a standard Homeowner's Insurance policy usually excludes. Here's a list of the exclusions with the percentage of respondents who assumed they had coverage:

  • Sewer backup: 55 percent.
  • Flood damage: 43 percent.
  • Sinkholes: 30 percent.
  • Earthquake damage: 29 percent.
  • Hurricane storm surge: 28 percent.
  • Landslides and mudslides: 24 percent.

Homeowner's Insurance does have some surprising benefits (more on that in ""), but these events aren't among them. When you look at this list from the viewpoint of someone who knows nothing about insurance, though, it makes sense. For example, if an insured knows that some water damage is covered, like discharge from a pipe, they might assume sewer backup is covered, too. It's all water damage in their eyes.

Plus, insurance agents often sell home polices by describing how it protects the policyholder for catastrophic events. Sinkholes, earthquakes, and hurricanes certainly sound catastrophic, so an insured could easily assume they'd be included.

While these misconceptions are understandable, they underscore the need for client education. Let's look at some ways you can help educate clients about what's in their insurance policies.

How to Teach Clients about Homeowner's Insurance

As the survey says, consumers prefer face-to-face meetings when they're shopping for Homeowner's Insurance. But even more people just want to renew without thinking about it. That's fine if everything goes well, but it may cause problems when they have a claim.

Make it easier for your clients to meet with you by:

  • Offering to meet them after work hours.
  • Going to their home or office.
  • Using online meeting platforms.
  • Incentivizing the meeting.

Once you have their attention, encourage them to comparison shop by submitting their information on Insurance Noodle. They can often see quotes from multiple insurers, and you can walk them through what each policy does and doesn't include.

For more pointers on how to educate clients, read "." For a deeper dive on the finer points of this policy, download our insurance agent's guide to Homeowners' Insurance.