26 Oct “Just Tell Me What I Need”
When meeting with a client or prospect, is this is a phrase that you hear? I doubt it happens on large, more sophisticated accounts. But could it? Whenever those words are stated, some caution should be exercised. Essentially, the client is saying they want you to make the decision for them. They will probably state that they don’t understand insurance. When it comes to auto insurance, we all know, the state minimums are not sufficient. For other types of insurance, there may not be a need to secure coverage for certain exposures.
I categorize this scenario as a lack of client accountability, or clients that don’t want to take any responsibility for their buying decisions. One of the key issues with lack of client accountability is that when these clients suffer an uncovered loss, they are likely the first to blame you (as their agent) for not selling them the insurance they needed. This is a fact pattern prevalent in many E&O claims.
First, how do you really know what the client needs? Is the state minimum sufficient? If the contract only calls for them to have $1 million of coverage, could they suffer a loss in excess of that number? Second, how well do you know the client? To better understand the clients’ exposures and their specific situation, utilize an exposure analysis checklist.
Let’s say the client or prospect is a good friend and says, “Joe, you have known me for a long time, just tell me what I need.” Even in this situation, ask yourself if you honestly know everything about this person. Definitely not. That is why caution should be exercised when clients give this type of statement.
Maybe the follow-up question from the client is, “What limit do most people buy?” I know some agents advise a personal lines client that most auto customers purchase around 100/300 limits. What if you were to tell a client this, they bought 100/300, and then proceeded to get into an accident where the bodily injury damages were in excess of the 100/300 policy limits? Could the client allege that they interpreted your comments to mean that 100/300 was sufficient? Quite possibly! Face it, while 100/300 limits are higher than the state minimums, they are really not that high and it does not take much of an accident to exceed these limits.
“Just tell me what I need” sounds like the client is asking you to make a recommendation. As you have probably heard, “recommend” is a very dangerous word as it has the potential to elevate the standard of liability to an advisor. “Suggest” is the better approach.
When a client says, “just tell me what I need,” it is best to make them aware of the various coverages. For those coverages proposed, be sure to include a variety of limit options (and possibly the corresponding premiums). By offering options, you are forcing the client to make a decision.
Making the client accountable for their buying decision should be one of the primary goals for your agency.