How To Advise Clients On Auto Insurance Savings

One day, an auto insurance policyholder might call your agency, asking how they can save more money on their policy. As an agent, it is not uncommon for you to receive these questions. How can you react, and what can you do to help them? 

You have the opportunity to help your clients save money on their car insurance. However, doing so will take careful consideration on your part. You’ll also need to carefully advise your clients on how these savings might take effect. 

Responding To Client Questions 

Clients who want to save on auto insurance costs will expect you to do your job professionally. That means they’ll want you to save them money; however, they probably don’t want to sacrifice necessary coverage in the process. Your job is to help them do that to the best of their advantage. Your priority is to advise them on the practical steps they can take that won’t cost them coverage, just to save them money.  

Below are just a few of the steps you might tell clients that they can take. These actions might reduce the cost of coverage you might need. 

Recommend A Policy Comparison 

You are an independent insurance agency, so you are not bound to the policy options of just one insurance company. Most insurers offer policy options that you can structure to look nearly identical to the coverage a client already carries. However, different companies might offer varying costs for these separate policies.  

As a result, you might be able to offer clients the option to search for a different, but similar policy that could help them save. Sometimes, the differences in policy costs might prove significant, while others will offer only arbitrary savings. If you do find a better option, the client can usually cancel their existing policy simultaneous to starting the new policy.  

Keep in mind, when you compare policies, keep all coverage parameters the same. Unless the client confirms that they want less protection, anticipate that they will want the same protection on both policies. 

Advise About Discounts 

Nearly all insurance policies offer discount opportunities. Not all applicants will qualify for all discounts. However, those that do meet the qualifications can often save significant dollar amounts on their coverage. In many cases, you can provide a variety of tips to help them qualify for as many discounts as possible. 

If your client has no accidents on their record, remind them that they can usually continue to qualify for accident free discounts as long as they stay safe on the road. 

Many clients can qualify for additional savings if they take a safe driving course. These courses can help them learn defensive driving tactics that might further reduce their risks of accidents. If the client passes a course approved by the insurer, they might be able to save on their rates. 

Other discounts might be available depending on how clients pay for their coverage. For example, some insurers reward discounts to clients who pay their premiums in lump sums or sign up for automatic payments or policy renewals. In these cases, customers might find it both easy and convenient to institute these changes. 

Consider Adjusting Deductibles 

Nearly all auto insurance policies contain deductibles. These are policyholders’ personal cost responsibilities for the claims they file. 

For example, some policies might have a $500 collision deductible. Therefore, if a client has a wreck, they will pay the $500 and the policy will pay up to its limits for the rest of a claim. For instance, if a wreck causes $3,000 in vehicle damage, the client will pay the $500 and the policy will cover the remaining $2,500. 

The thing about deductibles is that they can influence a customer’s premiums. If someone increases their deductibles, then they take away some of the cost risk from the insurer. For example, if someone carries a $1,000 deductible (as opposed to $500), then the policy might only have to pay $2,000 as opposed to $2,500 for that wreck. Because the insurer might have to pay less, they might be able to reduce the client’s premium costs as a result. 

Therefore, if you encourage your clients to increase their deductibles, you might be able to offer them reduced policy costs. 

Tread carefully, though. You don’t want someone to increase their deductibles to a cost they cannot afford to pay. This can cause issues for both the insurer and the policyholder. 

Avoid Reducing Necessary Coverage 

You should never recommend that clients cut back on their coverage just to save money. Doing so could mean they might not have policy funds available when they desperately need them. That is contrary to the point of having insurance. 

Still, you could take a look at their coverage to see if certain policy elements might no longer be necessary. For example, a client who has paid off their car might have no need for a gap insurance policy or replacement cost insurance. Instead, a cash value policy might help them receive enough protection for the value of an older car, and this could reduce their premium. 

Nevertheless, you should employ other avenues before attempting to reduce a client’s policy limits. There are multiple options out there, and with attention to detail, you can often help your clients still save on their rates.