Rising costs due to pandemic-related supply chain issues are everywhere — and we’re all suffering from some degree of pandemic fatigue over health concerns, various restrictions and myriad other difficulties. As a result, many people simply have no appetite for any more bad news.
So how do you convey the risks associated with having an underinsured home due to price increases on building materials to an audience that’s been bombarded by inflationary cost hikes at the supermarket, gas station and practically everywhere else?
Lead With Facts and Figures
It can be helpful to put the situation in context by offering customers some numbers to meaningfully convey exactly how a house that was adequately insured two years ago could now be underinsured. According to a report by The National Association of Home Builders last May, the price run-ups for wood-based building materials added nearly $36,000 to the cost of a typical single-family home. And the Bureau of Labor Statistics’ May Producer Price Index reported that the cost of copper wiring increased by more than 40% in 12 months. In the current climate, offering some concrete facts may help customers be more accepting of the new reality, which isn’t all negative.
Look for the Silver Lining
Your customers are no doubt aware that the U.S. housing market has been hot for quite some time — and shows no sign of cooling down in the near future. And while that may necessitate additional coverage, it also means most people’s home equity has increased in the current economic conditions. Homeowners can reap the benefits of their growing net worth so long as they sufficiently safeguard their assets. It’s like finding a windfall — now, you have to keep it safe so you can enjoy it. Reminding clients that there’s a positive side to this equation may soften the blow and encourage a more positive attitude about doing what’s needed to protect their increasing assets.
Lower Total Costs With Offsets
You can act as an ally and advocate for your clients by seeking out savings opportunities to help compensate for premium increases. If, for example, they aren’t bundling coverage, explore that option with them. See if another one of your carriers can offer a more competitive price. Also, make sure your customers are taking advantage of all savings options that might be available to them, such as:
· Monitored security system.
· Multiple policies.
· Roof or window upgrades.
· Storm shutters.
· Early signing discounts.
· Leak monitoring/automatic shutoff.
· Smart home features.
· Claim-free history.
· New home discount.
· Loyalty program.
· Automatic payments.
· Paperless billing.
· Veteran or other occupational discounts.
· Good credit.
· Removal of hazards (e.g., trampolines).
· Nonsmoking household.
Of course, another way to curb insurance costs is by raising deductibles. Homeowners should only consider taking that step, however, if they can afford it in the event of a claim.
The Last Word
In a world where risk seems to shift continuously beneath our feet, the risk of being underinsured is one that you can help your clients address and mitigate with the many tools available to you as a We Insure agent.
"The information contained in this page is provided for general informational purposes only and may not be applicable to all situations. WeInsure makes no guarantees of results from the use of this information."
The information contained in this page is provided for general informational purposes only and may not be applicable to all situations. WeInsure makes no guarantees of results from the use of this information.