Dax Craig is the co-founder, president and CEO of Valen Analytics.
For homeowners, the moment of truth with their insurance companies usually comes in the aftermath of a catastrophe. After years of paying premiums to a company to ensure their homes are protected in the case of a natural disaster—earthquakes, wildfires, hurricanes, tornadoes—was it worth it? For people who have to repair and rebuild their homes, the claims process will make or break their relationships with their existing insurers.
Although insurance carriers and agents can’t predict when the next catastrophe will strike, ensure customer satisfaction with the five steps outlined below. It all begins with clear communication between carriers, agents, and the homeowners they insure..
1. Determine what education programs are in place
For many clients, insurance is the most conceptually confusing industry they will interact with over the course of their lives. Adequately educating your clients about their policies is paramount to satisfaction and success. That responsibility falls upon the agent, as you have to directly interact with the client on behalf of the carrier.
Agents must be proactive and stay current with the latest policies and standards and relay that information to customers. Some insurers offer their agents free online lessons, with options to continue their learning at a discounted rate. At the client level, social media is a game-changing resource, as carriers can distribute educational information over networks such as Facebook and Twitter.
2. Establish the market value of a home
Do your customers know the difference between the market value and replacement costs of their homes? Before the economic crisis, homes were valued at an all-time high, but housing prices have dropped significantly since then. People may be tempted to drop their homeowners’ insurance coverage amount to match the current market value of their home, but this is a false indicator of the true costs it would take to fully reconstruct the home.
In today’s market, replacement costs often exceed the value of a home. Don’t let homeowners rely solely on house listing sites to determine the type of coverage their homes should have. Instead, communicate with your customers to ensure that they are adequately covered in the case of a total loss.
Predictive analytic technologies help insurers identify homes that are subject to inaccurate insurance-to-value calculations. Having the most accurate information will make the claims process that much better.
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3. Do the math with your customers
Although the term “deductible” is used often, agents should ensure that their clients know exactly what a deductible is. Many customers don’t calculate the math when deductibles are expressed as percentages.
Talk to homeowners to determine a reasonable deductible, one that fits within their personal budget. Timing is everything: Hurricane season is a great time to reach out to customers in hurricane-prone areas and make adjustments. In some cases, customers may decide on a higher premium and lower out-of-pocket payments in the case of a catastrophe.
4. Encourage your customers to plan ahead
If a homeowners’ insurance policy stipulates that $200,000 is the cost to rebuild a home entirely, most insurance companies won’t cover additional costs if the actual cost to rebuild was $250,000 (although there are exceptions with a premiere plan). Homeowners may not calculate in advance how much it will truly cost to reconstruct their homes, and may not think to reach out to their agents if they make a major renovation to their home. Staying current with the right amount of insurance coverage is critical to overall customer satisfaction.
5. Help your customers save money and minimize the chance of a total loss
According to a Fox Business report, homeowners who invest in protective measures will see that investment pay for itself and then some. For example, homeowners who retrofitted their homes in Florida and South Carolina will see premium discounts of approximately 23 percent on wind insurance premiums.
Similarly, the Mississippi Windstorm Underwriting Assn. offers a 25 percent credit for homes built to a “fortified” standard. Other precautionary measures, such as hurricane straps and shutters, can yield significant discounts for customers, with rates varying by state and carrier. Because many homeowners aren’t aware of these potential discounts, carriers and agents are responsible for educating and encouraging policyholders to encourage them to take the necessary steps to minimize potential loss.
Agents are the key players to building a solid relationship between carriers and homeowners. Stay current with policy information and options, and reach out to your customers at least once a year to ensure they are properly covered and well informed of the steps they’d take in the worst-case scenario.
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