For many consumers, familiarity influences insurance choices
April 23, 2014 by Ruth Ann Monti
Shopping for insurance is not high on many people’s to-do lists, a factor that makes selling it particularly difficult, even though insurance is required for cars, home mortgages and now health care. In the United States, insurance agents face a lot of denial when they discuss risk and try to explain how insurance can protect consumers from financial ruin. But consumers rarely perceive personal risk to their health, property and income.
Agents need to look for opportunities to personalize consumer risk assessment, to educate and reassure clients and prospects that insurance is an investment that will provide a buffer they just might need one day.
Experience with disaster sells property insurance
Consumers who have been in or near a disaster see themselves as being at higher risk for another one and may be more open to insurance. People who live in earthquake zones or those recently affected by floods show the highest concern for their own risk, the Insurance Journal reports. But urgency seems to fade with time. The Journal also found that just two years after Hurricane Katrina, as hurricane activity waned, Gulf Coast residents were unconcerned about another killer hurricane.
The time to have an insurance discussion is shortly after such events, before complacency sets in with the return to normalcy. For example, if you sold property insurance, it would be wise to consider purchasing targeted leads in regions that suffered a natural disaster in recent months. You would need to be sure the leads haven’t been over-sold and are distributed under tight limits. There are many services that provide high-intent insurance leads that you can use to gain valuable clients.
Provide car insurance education
Car insurance has become very competitive in recent years, with companies falling over one another to offer the cheapest policy possible and still meet minimum state requirements. These nonstandard policies might be good in the short-term for people who drive very little or who temporarily need something cheap and legal, but not all consumers understand that state minimums are not intended to be a guide for appropriate coverage.
It isn’t easy to persuade customers to purchase more than the minimum for liability insurance. Even with the high number of road accidents, denial about ever getting in an accident is high. Remember the struggle to get everyone to buckle up?Speak honestly about these policies to young drivers and their parents. Explain that they aren’t considered standard by the industry and consumer groups. As MSN Money points out, they won’t be covered for accidents that can happen during a pizza delivery job, for example, and a car’s value is often depreciated before paying out after an accident. In short, they really don’t help consumers when they need it most.
Get the word out about life insurance qualification
Most consumers don’t understand life insurance, but a little bit of education can go a long way. GenWorth Financial’s 2012 LifeJacket study discovered that many Americans incorrectly assume that pre-existing conditions — the reason so many were unable to afford or even qualify for health insurance in the pre-Obamacare days — applies to life insurance as well. Up to 54 percent of Americans don’t have life insurance at all.
“We need to redefine the word ‘healthy’ in the context of life insurance eligibility,” says Janet Deskins, a GenWorth senior vice president. It turns out that many common conditions that used to make it hard to get health insurance, such as anxiety, high cholesterol and asthma, don’t apply in the life insurance market. Talk about this and get life insurance back in the discussion.
