In some ways, the market for homeowners insurance has never been better. The housing market has soared in recent months, with people reacting to the change in job demands since the pandemic and realizing they need more space. However, the number of homes available is somewhat stagnant. The competition for buying houses is fierce, and that competition, plus rising costs in building and remodeling materials, has led to a 20% increase in prices (considering the inflation rate) since the pandemic began.
The current housing market offers insurance brokers an excellent opportunity to sell new homeowners policies, but the rise in housing prices makes those policies more expensive. The rising cost of homeowners insurance also presents challenges to current homeowners who are seeing their mortgage payments rise. 2022 offers a mixed bag for those selling this type of insurance. However, you can improve your sales success by incorporating the following tips on how to sell homeowners insurance.
1. Become a Partner in the Hunt for Housing
Buying a home offers several risks for the buyer. They need to find a home that fits their family’s needs while staying within their budget. Also, they need to ensure that the home meets all safety and community standards. Finally, they need to establish that the home can be completely insured at a price that will not make their mortgage payments too high for them to comfortably handle.
You should work to integrate your job into the homebuying process. When you offer your services as an agent before the purchase, you can help protect your clients while enhancing your own business. You become a trusted partner with current and new clients as they make this huge life decision. Your car insurance clients should know that you offer this service as well since many may be considering purchasing their first home. Your best prospects may well come from your own client list. Make certain that you advertise your ability to help with insurance information before your clients buy.
2. Explain Why Replacement Cost Insurance Is Vital
Lenders will require homeowners who have financed their homes to carry homeowners insurance at 100% of the home’s replacement cost. Since the cost of materials has steeply risen in recent months, mortgage payments are also rising for some due to the increase in the price of their homeowners’ policy premiums. Homeowners in the U.S. find that renewing their policies often means an increase of 4% more than last year. In fact, the average annual homeowners premium is now $1398. You may receive inquiries from current clients asking if they can simply insure for their home’s current value instead of the replacement value.
Even homeowners who have paid off their homes should not make this move. The cost of replacing a home will probably be higher next year than this one since materials could easily continue to rise, particularly because of current global unrest and the persistence of the pandemic. A fire, tornado or another natural disaster could level a home and leave the underinsured client short $50,000 – $100,000 or more in home insurance coverage. While increasing policy rates can be a financial hardship, facing that kind of shortfall would be disastrous for most people.
3. Embrace Technology
The property and casualty insurance industry can better serve clients by embracing new technology that allows brokers to customize coverage for policyholders. Just as auto insurance has introduced the use of sensors to determine safe driving habits, sensors can allow homeowners to prove that they are lower-risk than others and that you can safely offer them a break on the cost of their policy. Internet of Things (IoT) devices generate data based on their daily use of home items. This type of tech has become much more affordable in recent years, and clients have begun to expect it. If you can incorporate this type of technology, you should. You will benefit from tailoring your policies to the specific homeowner.
4. Consider Partnering with a Realtor or Lender
While this step seems obvious, it happens less often than it should. However, an informal partnership with a realtor or lender can improve success for all parties. As an insurance agent, you sometimes know when clients are planning to house hunt. You certainly know when clients’ homes have been so damaged that they need to rebuild or buy another home. This knowledge can benefit lenders and realtors. Lenders can easily give realtors and insurance brokers a shout-out when approached to preapprove a mortgage. You can get many quality leads from such an arrangement.
You will have to provide solid information to your partners so that they will equally benefit from the arrangement. Doing so means that you will have to think about what they need and touch base regularly. Consumers want to simplify their homebuying experience. Many will be happy to take recommendations from professionals that they trust instead of searching for these other professionals on their own.
5. Improve Customer Service
In a hard market where insurers are holding the line on insurance rates, agents have limited options to attract new clients and prevent their current clients from jumping ship. The best way to keep customers is to offer a higher level of customer service, including adding AI for the consumer’s convenience. But you also have other ways to impress policyholders.
Availability has become more important than ever since people have become accustomed to 24/7 service for many of their needs. Few want to leave home and visit you at your office. While specific carriers may offer chatbots or online agents that answer questions at any time, your clients will still want the ability to reach their local agent quickly.
Encouraging your clients to call, text or DM will allow them to reach you immediately at most times of the day or night. Making yourself that available can be challenging, but that level of service will also cultivate consumer loyalty and differentiate you from other less-dedicated agents.
The ProspectNow Advantage
ProspectNow has one of the most extensive databases available of both personal and commercial properties, offering data at a price much lower than you will pay on competing platforms. Established in 2008, ProspectNow is known for its quality service and breadth of data: approximately 100 million residential listings and 42 million commercial listings.
By using ProspectNow, you will close more deals and definitely make more money! It is a vital tool for success in real estate or real estate marketing. Plus, ProspectNow is easy to use and offers trustworthy, reliable data.
Final Thoughts
2022 will offer some challenges for insurance brokers, but you will also benefit from a hot housing market. The cost of homes and homeowners insurance policies is rising more than the rate of inflation, which is especially hard on first-time homeowners. However, you can earn their business and trust by offering advanced technology, superior customer service, a deep understanding of the housing market, and a superior product.
Because replacement costs are rising so quickly, clients need you to recommend policies that will meet their needs in case they do lose their homes to disaster. You provide an essential service for anyone looking for or actually buying a home. Despite these challenges, 2022 can be an excellent year for your business.