I’ve been talking with a young couple this week. We’ll call them Ben and Amy (not their real names). They were referred to me by two of their friends. Ben and Amy are buying their first home in the McKinney / Allen area of Texas and they are excited and a little nervous with all the things that have to be done in order to close. Not only are they first time home buyers, but they are also first time buyers of home insurance.
In my initial conversation with Ben he related he did not know anything about home insurance. I understand. I didn’t either when I bought my first home. I explained we would take it slow and that I would educate him in the process by both explaining each item within the quote as well as by asking him questions he’d be able to answer. There are two broad areas I want to cover in any initial conversations with someone;
- What they’re trying to accomplish or protect
- Information about them and their life to make sure we’re providing the best coverage to meet their needs
The first part is straightforward; the person I’m talking with is looking to insure something tangible. In Ben and Amy’s case, it’s their first home. The questions I asked Ben about their home included:
- Address of their new home as well as their current home
- Year built and square footage
- Number of bedrooms and bathrooms
- What kind of living areas and dining areas does the home have
- What kind of flooring does the home have
- Does it have a fire place
- What kind of counter tops are in the kitchen and baths
- What grade of cabinets are in the kitchen and bath rooms
- How old is the roof
- Did the sellers disclosure mention when the water heater or AC unit was last replaced
As I explained to Ben, this information provides me with data on the home. This data is then input into the replacement cost estimation system of each insurance company I work with. The replacement cost estimation systems generate a figure they believe it will take to replace the home in the event of a total loss such as one due to a bad fire or a direct hit by a tornado.
The information Ben provided me and that we reviewed from both the Collin County Appraisal District and Zillow included the following:
- Their home was built in the mid 1980’s and has a little less than 1700 feet
- It has three bedrooms, two bath rooms a living or great room with a fire place, dining room and breakfast nook
- It has a brick exterior and a composition shingle roof that was replaced in the last 3 years
- Their home also has a two car attached garage
- The flooring includes carpet, tile and laminate wood floors
- The countertops in the kitchen and bathrooms is synthetic and the cabinetry is not custom
The second part of my conversation helps me understand enough about Ben and Amy and where they are in their life. The questions I asked Ben were not designed to be nosy but to help me customize their home policy to protect them in ways that go beyond a fire or water leak. These questions include:
- Tell me about your family
- What kind of work he and Amy do
- Do they have any dogs
- What are their plans for their new home
These questions help me recommend levels of liability and medical coverage to protect them financially in the event someone comes onto their property, invited or not, gets hurt and sues them for negligence. Things happen and the better I understand a person’s life situation, the better I am able work with them as their personal risk advisor to protect them in ways they may not have thought of.
Ben and most of the people I work with understand and appreciate the questions I ask when I explain the reason for the questions. I’ve only had one person complain about my questions and she went on to state that no other insurance agent she talked with asked them. That also told me that any agent who’s not asking these questions is doing an inadequate job of protecting their clients.
When Ben and I concluded our discussion, I created quotes with each of the dozen companies I work with to find the best possible solution for him and Amy. Next week, we’ll look at the second conversation I had with Ben as we reviewed his home insurance quotes. Do you have a question or comment? Share them with me in the comments section of our blog or on our Facebook page.