With unemployment numbers estimated at 23.6%, many households are experiencing a financial squeeze. Averaging over $1,000 per year, the cost of insuring a private passenger auto is not cheap. People are driving less. As your clients and prospects begin to seek ways to reduce their auto insurance premiums, it will be up to you to provide some guidance, and any much-needed relief where possible.
First and foremost, explain that canceling a policy, even if the insured is not driving, should be avoided at all costs. Damage to the auto can still occur, and a history showing a gap in coverage can lead to paying more down the road. Educating your clients on possible adjustments to coverage and discounting programs available will be key to avoiding cancellations or your clients price shopping their way out of your personal lines book altogether.
Being a little proactive can go a long way. A typical client contact may look like this:
- Ask how they are doing, and if any significant life changes have occurred that should be factored into their coverages.
- With the recent decrease in autos on the road and fewer accidents, many insurance companies have opted to pass their savings in claims along to policyholders in the form of refunds or credits. If applicable, answer any questions about how the refund or credit to their policy works.
- Discuss strategies to reduce auto insurance premiums as needed, looking at deductibles, and some of the “extras” like towing and roadside assistance. If you can, avoid reducing or eliminating essential coverages, such as bodily injury (BI) limits. If too much of your book has low BI limits, it could impact your standing with insurance companies writing the business.
Pay as you drive programs
For safe, low-mileage drivers, a usage-based insurance program may be an option to save money. Drivers sign up to let their insurer track their driving through a telemetric device installed in their car and receive possible discounts based on how much they drive, when they drive and how well they drive. With many community restrictions still in place, lower mileage can reduce premiums.
Review the various discounts available for multiple cars insured, multiple drivers and good student discounts, as changes may have occurred since they purchased the original policy.
A quote-to-effective-date (QTE) discount may be available for new auto quotes. For new business, homeowner and condominium customers, if the bundled auto quote is submitted in advance of the policy effective date, the client could qualify for a QTE or Early Quote Discount.
Savings your Clients will Appreciate
As the pandemic has derailed the economy, most people are looking for savings wherever they can find them. Knowing that their independent agent has their best interests at heart can go a long way toward building client trust.