Tips For Real Estate Agents/Loan Officers: Ways to Help Your Clients Lower Their Home Insurance Premium [hits]

Clients who are purchasing a home often times are not aware of some of the details that can help minimize the insurance costs. The lack of information can lead to missing out on potential savings. This is especially important for loan officers who are trying to qualify the buyers. Therefore, the tendency is to seek a low cost policy that may contain gaps in coverage just to get the loan approved.

Question you may ask yourself is, are you comfortable leaving clients underinsured just to close a deal?

The truth is that a good comprehensive insurance plan does not need to be expensive.

Adding value to your service

There is not a more solid lead source than personal referrals from customers. People often remember someone who went that extra mile for them. By adding a bit more to your service can go a long way and increase the number of positive reviews. I’m sure you know the effect online reviews can have on your business…right? Providing a bit more will certainly increase the chances of getting those well deserved positive reviews to improve your online exposure.

Evaluate Your Sources

Your portfolio of listings are going to differ in so many ways. Some homes may have diving boards. Some are going to be located near brush. Some homes are going to be older than others. You get the idea.

The point is that you should have at least 2-3 solid insurance agents in your list of preferred sources.  One independent broker and 1-2 Captive Agents that you have confidence will place the best interest of the clients first.

A captive agent will only have the ability to offer one company. An independent broker works with multiple companies and will provide several options.

Of course, many of your clients may already have an insurance agent in mind, and that’s ok. But because you have solid network partners who are an extension of your service, you can provide them with a bit more. Sometimes, one outstanding source is all you need.

Either way, if you are able to inquire in advance the items below, you will be a step ahead. Your clients will thank you for it. Being proactive with this list will expedite the process and help your clients get the best overall value.

The More You Know, The Easier The Sell

The more you know about a property gives you just that much more credibility. It’s often difficult to acquire exact details but if you look deep enough, it can pay dividends. It can also provide you a bit more to talk about at your open house.

Dig For Info

Here is an outline of a list of simple details that can make a difference that are often not noted on purchasing documents:

• Has the roof been replaced?

Sellers will generally know when they last replaced their roof. Often times they will have documentation. But even if they don’t, asking the year is usually good enough. In general, an update within the last 20 years will suffice.

A policy may be set to cancel if the roof shows damage. A lifted shingle can raise a red flag. Be careful for those low cost fire policies that exclude roof coverage. Not good for a client to find out that their roof leaked causing water damage inside the home and no coverage is provided.

Don’t be known as the agent that just collected a hefty commission.

• Does the plumbing have copper pipes?

Copper is a home’s gold. Help your clients avoid surcharges due to not knowing the last time the plumbing was updated. If the pipes are PVC, Galvanized, or anything other than copper, ask the sellers to replace the pipes or offer splitting the costs with the buyers for the upgrade. The buyers will appreciate it in the long run.

• Electrical update

It may be difficult to remember when the last time the electrical panel was updated, especially if the home has had different previous owners. A good way to find this out is by checking with the planning division for the City the home is located in. You may be able to kill 2 birds with one stone if there is a central air conditioning system in the home or if an addition was added to the home.

• Air Conditioning and Heating

If there is a central air conditioning system in the home that looks dated, asking City Hall when the permit was issued to install it will answer the questions and be a good indicator regarding the electrical.

• Central Burglar & Fire Alarm

The percentage of these discounts have decreased over the past few years with certain carriers but can still make a difference. A select few have increased or maintained the savings. Some carriers also offer a bit more of a discount if it’s hard wired to the station. A system that detects carbon monoxide can not only save some lives, but a few dollars too.

• Fully Installed Fire Sprinklers or Partially Installed

Are there fire sprinklers in all major rooms only? This will determine if the home has partial or full sprinklers and can make a difference in the discount. For a home to have full sprinklers, they must be installed in the closets, attics, and basements in addition to all common areas and rooms. Otherwise, a smaller or no discount will apply.

• Swimming Pool with Diving Board or Slide

Most major carriers will insure a home with a pool. Some may not by the simple fact that there is not a secure fence surrounding the area. Another common declination of coverage is a swimming pool with a diving board or a slide. Insurers will view this as a higher risk of liability. Above ground swimming pools can also get declined.

• Trampoline

It’s a young kid’s dream to have a trampoline to jump on. You’ll notice that at birthday party with a jump house. But these can be red flags from insurance carriers. To reduce your clients chances of being declined and it’s a must for them to have one, remind them to have a net for protection.

• The Common Multi-Policy discount

As mentioned earlier, clients may already have their go to agent. However, because of the features or location of a home, they may not be able to package it with their auto insurance. For those price conscious clients, “sometimes”, packaging does not provide the best savings. Although some carriers may offer very low home insurance rates, their auto insurance is high or vise versa. In any case, inform your clients to consider the overall combined rates and not by individual policy type.

• Highest Level of Education or Profession

If your clients have a 4-year degree or better then they may qualify for some savings. Even for those that don’t have a higher education, the type of occupation may help them save. Certain types of skilled professionals and government positions that do not require college degrees have discounts waiting. Keep that in mind when assisting your buyers.

• Do the buyers have or plan to have a dog that falls under the list of vicious breeds?

Some insurance carriers will automatically exclude animal liability so it will not matter. However, knowing this ahead of time can prevent having the policy cancelled after an inspection if placed with a carrier that will not insure a breed on the list. Most insurance agents will ask the clients themselves but some don’t. It’s best to try to get this info to be safe or before it’s too late.

Appraisal Reports Are Helpful But Omit Items

It’s extremely helpful when appraisal reports are provided to insurance agents. But, they don’t always contain all details that can help lower insurance costs. Such as some mentioned in this post. A good appraiser will be thorough and provide some good insight on the features of the property.  But some reports will only provide the basics that can be found on Zillow or Redfin. Important information of course but more depth is needed to get the absolute best for the client.