Whether you’re looking to sell course of construction insurance for the first time or want to identify new prospects, consider homeowners. Also referred to as personal lines clients, this segment is composed of individuals and families who want to build, remodel or have something installed on their residential property, and often need guidance when it comes to construction insurance.
Homeownership is growing every year. According to the National Association of Realtors, the number of new, single-family homes being built is expected to surpass one million in 2020, the fastest rate since 2007. And, a 2019 Trulia survey shows 90 percent of homeowners plan to renovate, which is up from 84 percent the previous year.
So, why are homeowners the ideal place to start? Simplicity. Often, their residential course of construction projects are less complex than their commercial construction counterparts, making coverage assessments easier for agents. And ultimately, they’re not rare. Everyone needs somewhere to live. You simply must decide how you’ll target residential property owners who need builders risk insurance and understand what their biggest challenges might be when undergoing construction.
First, decide how you’ll identify prospective homeowners. Here are a few ideas:
The best place to start looking for potential personal lines clients is your existing book of business. Maybe you have a homeowner client whose new construction you insured 15 years ago. According to the National Association of Home Builders, the average life of many household features (e.g. appliances, HVAC units, carpet, plumbing fixtures, electrical controls, and more) is about 10 to 15 years. These clients might already be planning a future renovation that needs a remodeling or installation builders risk policy. Organize your client database and sort by the year their home was built to determine who might need a targeted email about whether they plan to remodel. Or perhaps you work with a contractor on commercial construction. The business owner who relies on you for commercial insurance might be planning to build their dream home soon, or your contractor client might be considering house flipping in their free time. You’ll never know until you ask!
Still looking for prospects? Search public remodeling permits. Many remodels require them, and they’re a matter of public record that you could find online. Cross-reference your client list with the permit list you find to identify existing clients who you could email or call about their scheduled renovation.
So you’ve identified a target segment of personal lines clients. How is business with them different from other clients?
First of all, some homeowners have never heard of builders risk insurance, much less had their own policy. They may even be under the false impression that their homeowners insurance policy will cover the renovation project they have planned. We hear that all the time. Learn how homeowners insurance and builders risk compare to guide clients through it.
Even the most basic coverage features can be intimidating to homeowners. So, explain the policy in detail to them. It will not only ease their mind but can position you as a trustworthy insurance counselor. Once you complete the builders risk application, get a signed copy of it for your records. This can ensure that, should a claim arise, you can demonstrate that the policyholder approved with the information provided and coverage selected in the application.
More than most, personal lines clients are very budget-conscious. Whether they’re self-funding the project or have a construction loan, premium matters and so does the out-of-pocket expenses they could be liable for if a loss occurs and the right coverage wasn’t secured. While the degree of coverage and risk will inform the cost, it is worthwhile to discuss the value of comprehensive course of construction coverage and the potential financial dangers of going without.
And as a best practice, use layman’s terms to ensure clients can fuller understand how builders risk insurance protects their interests and from what exactly they’ll be protected.
Ready to prospect homeowners and house flippers? Download Builders Risk Game Plan: 7 Tactics to Sell to Personal Lines Clients for steps you can take today.
This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.
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