As insurance agents, you deal with prospects who either understand the need for coverage or underestimate it. People who understand the need for insurance call you for rates. As for those who underestimate coverage, when you offer them insurance, the conversation sometimes ends with a simple “No thanks, that’s fine!”
So what are you saying? What’s the best approach for someone who doesn’t quite grasp the critical need for good coverage? Here are five things I, a personal injury lawyer, would tell your clients.
1. Anyone who’s ever had insurance has never regretted having insurance, but anyone who didn’t and needed it…oh boy, do they regret it.
If you go through the first 40 years of your life as a driver without ever having had an accident, you probably won’t say, “Man, I really regret having car insurance all this time!” A person who goes through their entire life without ever being in a car wreck or even a fender bender will likely look back and be grateful.
What if that person had a car accident? What’s worse – what if they were in a car accident where they were not only at fault, but the other party was seriously injured? Can you imagine how grateful they would be to be insured? The same goes for having the right amount of property/accident insurance.
Remind your clients that the only regret they should be concerned about is not being insured. And, in the end, it comes down to the numbers. Let’s say the average homeowner’s insurance policy costs about $1,300 per year (Bankrate.com reports that the average homeowner’s insurance policy with $250,000 of homeowners coverage costs an average of $1,383 per year in the United States ).
Let’s say it’s $2,000 a year with liability insurance included. It’s about $166 per month. During this time, we represented a woman who was attacked and injured by a dog and successfully helped her obtain compensation of $600,000. Let’s do the regret exercise one more time. Who hurts the most? The person who paid $166 a month for peace of mind and never had to use it? Or the person whose best friend decided to bite a neighbor and was, therefore, brought to justice for it?
2. The best offense is not always a good defense.
And I’m not talking about Bill Russell’s Boston Celtics in 1963 who were, by most accounts, the greatest defensive team in basketball history. I talk about liability when someone is injured on your property and you are held responsible by them. The defense is, in these situations, a last resort. Why? Because the best offense against such risks is to have the right insurance.
Now, full disclosure, I’m not a defense attorney. I work on the other side of a personal injury case alongside the injured or injured party. However, I know that defense attorneys love nothing more than clients who don’t have adequate coverage (assuming they can afford it). And this is especially true when the client has assets to lose.
Have you ever heard the phrase “I’m coming to get your house and your car” in a movie or on TV? Well, you won’t just hear it in divorce court. Your assets are always at risk when you don’t have adequate insurance and someone is injured on your property. This means that the defending party will pay and fight as much as possible not to lose these assets. Which, in turn, means a defense attorney is going to charge more hours.
The average defense attorney in California, for example, charges around $300 to $400 per hour. The average length of a personal injury case where your clients are uninsured varies from case to case. However, it can last about two years. And that is if the case is not judged (which is the case in approximately 30% of cases). A conservative estimate for a case that has dragged on this long could be as high as $240,000 in defense attorney fees.
But that’s not all. These are just your clients’ fees. This does not take into account the compensation awarded to the plaintiff. This means, essentially, that even if you win the suit, you still lose if you don’t have the right insurance. And if you lose the suit, you lose big.
3. Talk, talk, and talk with your insurance agent to understand what is and isn’t covered.
Another common thing I see is someone who thought they were covered for one thing but ended up not being covered for it. This happens in all types of insurance. Drivers who think they have roadside assistance. The family of a deceased person who learns the hard way that a certain type of death was not covered by their loved one’s life insurance policy. And, yes, landlords who realize too late that they are held responsible for an injury that occurs on their property.
These are unfortunate results that occur due to insufficient communication between an agent and the insured. Everyone loses when there is no adequate coverage. It’s not uncommon for a defendant to simply not have the money or assets to pay a judgment against them. If the defendant is not covered and the plaintiff does not have their own insurance to cover their bills, they may also be liable for their own bills.
The best advice I can give to any of your clients is to tell you as fully as possible about their complaints. And to you, as insurance agents, I encourage you to remember the risk and liability to which customers are exposed without the proper coverage. Because all it takes is one event to turn their lives upside down.
4. A good insurance policy turns an apocalyptic day into just another Monday.
A great insurance policy turns an apocalyptic event into another Monday for the insurance company. However, this is only true if the coverage was sufficient. It’s there that you intervene. As lawyers, we have a lot in common with insurance agents. Both:
- You want to make sure that our customers are properly compensated if necessary.
- If a claim (or a case in our field) arises, we want our customers to win.
- We want our customers to have peace of mind.
This last point is particularly true. Stress kills. Some studies show that it is just as harmful as smoking. A good thing to remind your clients when they doubt the value of an insurance policy that takes into account any realistic liability is:
The worst thing in your life can cost you tens of thousands (or even hundreds of thousands) of dollars. But the right policy will turn the same event into a 10 minute phone call.
The stress that comes with losing thousands of dollars when you could otherwise only pay a few hundred dollars just isn’t worth it. As I said earlier, these cases can drag on. The bills are piling up. And life does not slow down. Peace of mind is an asset. And his absence is worth more than a few hundred dollars.
5. Good coverage means everyone is happy.
The truth is that some agents like to sell limited liability coverage just as much as some people like to buy it. But ultimately, if tragedy were to strike, no one would be happy.
Addressing both agents and their clients, the golden rule is to consider liability. Negligence is generally proven in court by four key factors: obligation, breach, causation and damages. In some states, for example, insurance agent malpractice boils down to these simple steps:
- As an agent, you had an obligation to the client.
- You have breached this obligation and are in breach.
- You are held liable as the cause of the damage.
Therefore, a faster sale is not always the best thing. And the same goes for customers when it comes to costs. If your clients disregard your sound advice, that responsibility lies with them, not with you. An agent can’t do much.
Dear all, talk to a lawyer!
I’ll end with this last piece of advice for everyone: talk to a lawyer!
Encourage your clients to speak to an attorney who works with personal injury cases. Many will do this for free and build a relationship that could lead to service in the future. But officers also need to reach out. You can learn a lot by understanding what the cases look like on the other side of the table.
It often seems that our clients believe that we only focus on our returns. As agents, you have the same challenge. Much of the service we provide to our clients begins with being informed and building trust. Transparency, preparation and a sincere desire to do what is best for our customers goes a long way.
Greg Kirakosian is a personal injury attorney and founder of Kirakosian Law in Los Angeles. Greg can be contacted at [email protected].com.
© All content copyright 2022 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reproduced without the express written consent of InsuranceNewsNet.com.