05 Jul Educate – Educate – Educate
Let me start with a question: Would you agree that your best customer is an educated customer?
I repeatedly hear from agencies that they agree with this position, yet it is questionable how much the agency is doing to educate those customers. Often, it does not appear the agency has an active campaign to ensure their clients have an increased understanding of insurance and the various coverages and how each works.
Over the last couple of months, the issue regarding the valuation of homes has been questioned. I would go out on a limb and state that today, upwards of 50% of homes are not insured to value and would suffer financial consequences if their home was destroyed.
I referenced some alarming construction statistics in the May 11, 2021 blog. They included:
- Lumber costs are up 50-100 percent
- Labor costs are up 8 percent
- Crude oil (a major component of paint, roof shingles, and flooring) is up 80 percent in just the last six months
- Prices for granite, insulation, concrete block and brick are at record high price levels
- Apartment construction costs are up to $9,000 per unit
Since these statistics are over a year old, is there a possibility the numbers are even more drastic? Most definitely.
Imagine that you are not an insurance professional and thus unaware of these issues. How would you know that if your house was destroyed, the limit on your homeowners might not be enough to rebuild? Probably, most customers would not know. This is where an active education campaign would probably add some value and, quite possibly, defense in the event of an E&O matter.
Could an active education campaign enhance your new business writings? Let’s say you just moved into a new community and were looking for an agent to handle your various insurance needs. You are active on social media and notice an extremely active agency educating their “listeners” and subscribers on insurance and how it works. Wouldn’t that probably attract you to that agency? For me, it would.
I have heard from many agencies of accounts returning to them after leaving the agency. The customers referenced that while the price might have been a little better with the other agency, they found that there was no effort from the other agency to help them understand their coverage and when changes might be needed.
For many years, we have all heard the statement that “Personal Lines is a commodity.” Personally, my reaction to that is, “it is a commodity if you allow it to be.” Client education is the difference, and an issue agencies should look to strengthen moving forward. Agencies that educate their clients (and potential clients) on insurance issues will reap the benefit of greater new business writings and stronger retention.