If your customers have ever gone through the process of quoting or purchasing a car policy, they may have encountered some common auto insurance terms that left them feeling confused. As an agent, your job is to educate your customers on what they are buying. Not only will this help to establish a trusting relationship, but it can make a difference in the sale.
Here are some tips on how you can break down the policy for your clients so they walk away understanding the ins and outs of auto insurance.
Define General Insurance Terms
There are far too many auto insurance terms for you to define them all to your customers. But since auto insurance can be so confusing, it is a good idea to at least break down some of the more common terms that they may hear.
Start with the more general definitions, such as the following:
- Policy contract
- Declarations page
- Premium
- Deductible
- Coverages
- Exclusions
- Conditions
A lot of these terms are applicable to most insurance policies and not specific to auto. Depending on your client, they may already be familiar with some, if not all, of these terms and what they mean. If not, just briefly explaining these terms is a great first start.
Explain Requirements
You also want to be sure your clients are aware of the legal requirements in your state. Most states require vehicles to be insured with at least a specific liability coverage limit. As a licensed agent, you should already know what the state requires, but educating your client is essential.
Some of the more important items you will want to address are the differences between split limits and combined single limits if your insurance companies offer them and why it is almost always a good idea not to carry the state minimum limit of liability.
In addition to what the state may require, you also must keep any third parties in mind as well. If your client’s vehicle is leased or financed, the lender will require the car to be insured for specific coverages as well. As such, it is vital for your customers to be aware of what those coverages may be.
Educate
A large portion of your job as an insurance agent is to educate your clients and advise them on the best policy for them. While defining standard auto insurance terms and specifying requirements is definitely part of this, real education begins when you break down and explain the coverages offered.
For many consumers, especially those in the younger demographic, an insurance policy is something they are forced to buy and not a necessity. This is the perfect opportunity for you to demonstrate your knowledge of the product and make suggestions of coverage based on their specific needs. Perhaps they just purchased their first home and should carry higher limits of liability, for example.
Personal coverage recommendations and professional guidance are the real value insurance agents bring to their consumers, and you should use this time to showcase that.
Final Thoughts
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