I'm sure it's happened to you once or twice; you've set up the perfect deal and your client comes back with the bad news that he/she can't get insurance on the property or the rate is so high that it jeopardizes the deal. Of course you told them to get a quote from whoever does their auto insurance and perhaps a few others, but it still seems like the insurance companies aren't making this easy.
Why is it so hard to insure some properties?
The answer isn't as simple as it may seem. There are so many factors that go in to rating a policy these days from credit, age of the roof, location, that even the most insignificant piece of information can have a drastic effect on the overall premium. So how can you help your clients get the best coverage they need at the most affordable price? Here are a few tips that may help:
•- Try to have your client get a quote on their home insurance before they apply for the home loan. The credit check can affect their overall credit score and have an impact on the rating.
•- Be careful of the roof. Often times an old roof, a wood shake roof, or a roof with more than two layers will end up in an insurance decline or increased premium. If there can be a contract put in place to get the roof repaired or replaced, most insurers will accept this and issue the policy.
•- Make sure the insurance agent has some time. If you call on a Friday afternoon needing evidence of insurance by Monday, you may have a hard time. Giving the agent a week or more will help not only in rating, but in a smoother transaction.
•- Work with an insurance broker. A broker has access to many companies that will have a broader appetite for more types of homes. Generally, they can match the home with the company that has best rates.
•- Give credit where credit is due. Make sure your client is asking for all the discounts that are available to them. Most common are multi-line, college education, new or newer home, theft and fire alarms, and renovated homes. Countless policies do not have all the discounts applied that should be.
•- Look for a higher deductible. One thousand dollars is as high as most will go, but there are insurers that can go as high as five. If your client feels uneasy about the higher deductible, make sure they see the price savings and see how long it would take to recoup the extra deductible should they have a claim
Finally, always make sure your client is getting the proper amount of insurance coverage they need. Poorly written policies can leave gaps in coverage that lead to a bad experience should there be a claim. If it's just a simple house with simple furnishings then the basic policy should suffice. However, if you have a high value client with a custom home and expensive furnishings, chances are there will need to be some endorsements added on to the policy. Have them work with an insurance professional that can take the time to do a full evaluation and get them the proper coverage that they need
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