Welcome to the world of comprehensive financial protection – where safeguarding client’s assets and securing peace of mind take center stage. As we help our customers navigate the complexities of life, it’s essential to consider the unforeseen risks that could potentially impact their financial well-being.
That’s where umbrella insurance policies come into play, offering an extra layer of security that goes beyond conventional coverage.
In this introduction to selling umbrella policies, we’ll embark on a journey to explore the invaluable benefits of this unique type of insurance.
Understanding the significance of umbrella policies is key to fortifying financial resilience for our customers.
Join us as we unravel the layers of this comprehensive coverage, diving into the reasons why umbrella policies are not just an option but a strategic decision for those who aspire to shield their wealth and mitigate the impact of life’s unexpected twists.
Let’s explore how these policies can be tailored to meet your customer’s specific needs, providing a tailored solution that transcends the conventional boundaries of insurance coverage.
The word umbrella liability policy is like trying to explain inland marine policies. The names don’t make sense when you tell someone what it is. So here is a simple definition.
An umbrella liability policy is a type of insurance coverage that provides an additional layer of protection beyond the limits of a primary liability policy, such as auto, homeowners, or boat insurance. It is designed to help protect you from financial losses in the event of a major liability claim or lawsuit.
But How do you Sell Umbrella Insurance? We will discuss features, definitions, strategies for selling umbrella policies, objections, closing the sale, real scenarios, and tips.
Let’s look at the features first. Here are 8 features of an umbrella policy.
- Extended Liability Coverage
An umbrella policy kicks in when the limits of your underlying liability coverage are exhausted. This means that if a customer faces a large liability claim that exceeds the limits of their primary policies, the umbrella policy provides an extra cushion of protection.
- Broad Coverage
Umbrella policies typically offer broader coverage than primary liability policies. They may cover a variety of risks, including bodily injury, property damage, and personal injury claims such as libel, slander, defamation, or invasion of privacy.
- Higher Limits
Umbrella policies usually provide coverage in increments of one million dollars, offering much higher liability limits than standard policies. This increased coverage can be crucial in situations where significant financial damages are at stake.
- Cost-Effective
Despite the higher coverage limits, umbrella policies are often cost-effective. The premium for an umbrella policy is generally lower than the combined premiums of increasing the limits on individual primary policies.
- Requirement for Underlying Policies
To qualify for an umbrella policy, the customer typically needs to maintain certain minimum limits on their underlying liability policies. These underlying policies act as the primary source of coverage, and the umbrella policy only comes into play once their limits are exhausted.
- Wide Range of Coverage Situations
Umbrella liability coverage can extend to various aspects of a customer’s life, including their home, rental properties, automobiles, boats, and more. It provides a seamless layer of protection across multiple areas of potential liability.
- Legal Defense Costs
In addition to the coverage for liability claims, an umbrella policy often includes coverage for legal defense costs. This can be crucial, as legal expenses can quickly add up in the event of a lawsuit.
- Peace of Mind
One of the primary benefits of an umbrella policy is the peace of mind it offers. Knowing that the customers have an extra layer of financial protection in case of a catastrophic event can provide a sense of security for them and their family.
This month’s content January 2024 is all based on our NEW COURSE (ALERT) we have developed coverage sheets that explain coverages, it includes scripts and role play videos!
Why are umbrella policies important?
I am really glad you asked! 🙂 These tips and explanations will help answer How do you Sell Umbrella Insurance?
This policy acts as an extra safety net, protecting the insured’s assets and future earnings from being seized in a major claim. It offers broader protection against large lawsuits or major claims, ensuring the policyholder isn’t financially burdened beyond their primary policy limits.
These policies are very important as they are not very pricey and they can protect an insured against the unexpected. There are many reasons to have one. The first that comes to mind is young drivers! They aren’t as skilled and do not have the reaction times most of us do, therefore the probability of accidents are higher.
The second is having large assets. When people know someone has money they are more likely to try and file a claim if something happens.
When I think of the ideal client to sell an umbrella to, it is really as simple as do they own a home and have an auto policy.
To be honest so many people fall into this category. Then you are thinking, “So people who rent don’t need one?” WRONG, they do too.
As we progress in life we usually go from our parent’s home to an apartment to homeownership. In these transitions, we all accumulate assets and “things” at different paces.
Today in 2024 young people are accumulating wealth differently and at a much faster pace. However, I think insurance education is lacking.
I bet there are many of those young wealthy entrepreneurs who don’t even know what an umbrella is. I am also sure they have advisers at certain stages that get these types of policies for them. They probably don’t even know they have one.
I know someone who is 23 and started bartending out of his home. He enjoyed mixing the drinks so much that he started to have “cocktails” parties in the apartment he rented. He makes decent money in the industry he is in (not bartending).
I mentioned the umbrella policy because if someone leaves his home drunk driving and hurts someone, he could indeed be liable. He got an umbrella policy for about $15 a month.
That is $180 a year, imagine if someone does cause an accident after leaving his home, how much will that cost in comparison to $180 a month? Oftentimes the objection is that they will never see that money again and why not just save that every month and self-insure?
It would take a really long time to save up to one million dollars at $180 a year. Wouldn’t it?
What we think we can do and what we do are two different things. So we have to think logically and make sure we are relaying the correct things to the client. So I would start by running a list of clients who have an auto policy and home policy with no umbrella and I would do a quick quote, call them and discuss anything I would need to adjust on the quote, and sell them an umbrella policy.
Besides this, you want to consider the following: High Net Worth clients, Business Owners, Frequent Travelers, Landlords, Professionals, Sports and Recreation Enthusiasts, Parents and Pet Owners (dog bites), Non-Profit Organizations, and Public Figures to name a few.
How do you Sell Umbrella Insurance?
When selling an umbrella policy to a client, consider the following.
Understand the Client’s Needs
Begin by thoroughly understanding the client’s personal or business situation. Assess their assets, lifestyle, and potential liability risks. Tailored approaches based on their specific needs and concerns.
Educate on Liability Risks
Clearly explain the various liability risks individuals or businesses may face. Discuss scenarios where primary insurance coverage may fall short and emphasize the potential financial consequences of being underinsured in the event of a lawsuit.
<bstyle=”color: #0cc0df;” >Highlight Coverage Gaps
Point out the limitations of standard insurance policies in covering high-cost liability claims. Illustrate how an umbrella policy fills these gaps by providing additional coverage beyond the limits of primary policies.
Demonstrate Cost-Effectiveness
Emphasize the affordability of umbrella policies relative to the increased coverage they offer. Provide cost comparisons, showing that the added protection is a relatively small investment compared to the potential financial losses in the event of a large liability claim.
Customize Coverage
Tailor the umbrella policy to meet the client’s specific needs. Discuss the flexibility of umbrella policies and how they can be customized to provide additional protection for various aspects, such as personal liability, business liability, or both.
Use Real-Life Examples
Share relevant case studies or real-life examples of individuals or businesses who benefited from having an umbrella liability policy. Concrete examples can help clients understand the practical value of this type of coverage.
Address Concerns and Questions
Be prepared to address any concerns or questions the client may have. Common concerns may include the perceived complexity of insurance policies, the need for such coverage, or the cost. Clarify and provide straightforward answers.
Emphasize Peace of Mind
Highlight the peace of mind that comes with having an umbrella policy. Knowing that there is an extra layer of protection can be a significant motivator for clients who want to safeguard their assets and financial well-being.
Provide Excellent Customer Service
Offer exceptional customer service throughout the sales process. Be responsive, and attentive, and demonstrate your commitment to helping the client find the best solution for their needs. Building a relationship based on trust can enhance the likelihood of a successful sale.
Follow Up
After the sale, follow up with clients periodically to ensure their needs are being met and to address any changes in their circumstances that might necessitate adjustments to their coverage.
By combining these strategies, you can effectively communicate the value of umbrella liability policies and help clients make informed decisions to protect themselves and their assets.
Who needs an Umbrella policy? How do you Sell Umbrella Insurance?
Umbrella liability insurance is designed to provide additional liability coverage beyond the limits of your primary insurance policies, such as auto or homeowners insurance. While the specific needs can vary, several groups of people might find an umbrella liability policy beneficial:
- High Net Worth Individuals: Individuals with substantial assets may want extra liability coverage to protect their wealth in the event of a lawsuit.
- Homeowners: Homeowners may want an umbrella policy to provide additional liability coverage beyond what their homeowner’s insurance offers, especially if they have features like a swimming pool or trampoline that could increase the risk of accidents.
- Car Owners: If you own a car, auto insurance is a necessity. However, if you’re involved in a serious accident where the damages exceed your auto insurance limits, an umbrella policy can provide additional coverage.
- Landlords: Property owners who rent out homes or apartments may face increased liability risks. An umbrella policy can offer extra protection in case a tenant or visitor sues for damages.
- Business Owners: While not a substitute for commercial liability insurance, business owners may consider an umbrella policy to provide additional coverage beyond the limits of their primary business liability insurance.
- Parents of Teenagers: If you have teenage drivers, they may be more prone to accidents. An umbrella policy can provide extra protection in case of a serious accident involving your teenager.
- Professionals: Some professionals, like doctors, lawyers, or other high-income earners, may face higher liability risks due to the nature of their work. An umbrella policy can offer added protection.
- Those Involved in Recreational Activities: If you participate in activities that come with a higher risk of accidents or injuries, such as boating or skiing, an umbrella policy can offer additional peace of mind.
- Volunteers or Board Members: Individuals serving on nonprofit boards or volunteering may face personal liability in certain situations. An umbrella policy can provide extra coverage beyond what the organization’s insurance offers.
It’s important to note that the decision to get an umbrella liability policy depends on individual circumstances, risk tolerance, and the nature of one’s assets and activities.
Need an idea of how to pitch an umbrella policy?
“Hello, my name is [Your Name], and I’m with [Insurance Company]. I wanted to take a moment to share with you the importance of safeguarding your financial well-being with our Umbrella Liability Policy.
Imagine this: You’re involved in a major accident or face a lawsuit that exceeds the limits of your existing insurance. That’s where our Umbrella Policy steps in.
It provides an extra layer of protection beyond your primary coverage, ensuring that your assets and future earnings are shielded from the potentially devastating costs of a large liability claim.
Our Umbrella Policy is affordable, customizable, and tailored to meet your specific needs. Whether you’re a homeowner, business owner, or someone with substantial assets, this policy offers peace of mind and security against unforeseen events.
Don’t leave your financial future to chance. Let’s schedule a brief consultation to discuss how our Umbrella Liability Policy can provide the additional protection you need. Because when it comes to your assets and peace of mind, we’ve got you covered.”
Now it is time for you to take that and customize your own elevator speech based on the specific features and benefits of the umbrella liability policy offered by your insurance company.
Script to OBJECTIONS: How do you Sell Umbrella Insurance?
“I already have enough coverage.”
When someone expresses concerns about having “too much coverage” and is hesitant to consider an umbrella policy, it’s essential to address their concerns while emphasizing the unique benefits that umbrella liability coverage provides. Here’s a response that aims to provide clarity and highlight the value of an umbrella policy:
“I completely understand your concern about having sufficient coverage. It’s important to be mindful of your insurance needs.
What makes the umbrella policy unique is that it’s not just about having more coverage; it’s about having the right kind of coverage to protect your assets comprehensively.
Think of the umbrella policy as an extra layer of security. It goes above and beyond your existing insurance, stepping in when the unexpected happens and the costs exceed the limits of your primary policies.
I suggest we take a few minutes to review your current coverage together. This way, we can ensure that you have the right amount of protection tailored to your unique situation.
It’s about achieving a balance that safeguards your financial well-being without overburdening you with unnecessary coverage.”
“It’s too expensive.”
When someone expresses concern about the cost of an umbrella policy, it’s important to acknowledge their budget considerations while also highlighting the potential value and cost-effectiveness of the coverage. Here’s a response that aims to address their affordability concerns:
“I appreciate your concern about the cost, and it’s completely understandable to be mindful of your budget. What I want to emphasize is that while an umbrella policy does come with a premium, it offers substantial protection at a relatively low cost when you consider the potential financial risks it mitigates.
I understand that everyone has different financial priorities, and I’m here to work with you to find a solution that fits your budget while providing the level of protection you’re comfortable with. Let’s take a closer look at the details and discuss how we can make the umbrella policy work for you.”
“I don’t think I need it.”
“I understand your perspective, and it’s completely normal to want to evaluate your insurance needs carefully. Let me share a few considerations that might help you determine whether an umbrella policy is a good fit for you.
I suggest we take a moment to review your current coverage and discuss any specific concerns or questions you might have. Understanding your insurance needs thoroughly will help us determine whether an umbrella policy is the right choice for you. It’s about ensuring that you have the right level of protection for your peace of mind.”
“I’ve never heard of umbrella insurance.”
“I appreciate your honesty, and it’s not uncommon for people to be unfamiliar with umbrella insurance. Let me take a moment to explain what it is and how it could benefit you.
An umbrella insurance policy is like an extra layer of protection that goes above and beyond your standard insurance coverage. It’s designed to provide additional liability coverage when the limits of your primary policies, such as auto or homeowners insurance, are exceeded.
I understand that learning about a new type of insurance can be overwhelming, but it’s about making sure you have the right protection in place. I’m here to answer any questions you may have and guide you through the process. Would you be open to a brief consultation to discuss your current coverage and explore whether an umbrella policy is a good fit for you?”
By providing clear and concise information about umbrella insurance and its benefits, you can help the individual better understand the coverage and make an informed decision about whether it aligns with their needs and preferences.
The Art of the Close
Once you are done with the “script” close your mouth, don’t say a word, wait for the customer to respond, and do not interrupt them. This gives them a chance to think and to respond accordingly.
At times WE convince the client that there is “something to think about” by talking too much and saying “Do you want to think about it?” What, to be honest, is there to think about?
Say: I can send that application over for signature! OR let’s get this started before something changes and the price increases, or We can get this started now or attach it to your renewal.
Think about selling people things they don’t really want. Like dessert, how often do we “need” dessert, but when the waiter brings it over and shows us how good it looks we are sold!
So How do you Sell Umbrella Insurance? You educate the client and tell them WHY they need it! Make it look good, DO YOU HAVE A UMBRELLA? Why or why not? You can only sell a product you believe in!
You must build long-term relationships with your clients. Are you building rapport, are you listening attentively? If your client interactions are only TRANSACTIONS then there is a problem.
We have a 12-question quiz and out of 100 I have seen recently I would say 98% say their staff is focused on the transactions and not the outcome! If your customers have become transactions then you have lost the battle. Our customers are what makes our agency run, without them we are nothing.
Think about that! Start building relationships and work on outcomes, not transactions! Getting to know your customers will also help you customize coverage for your clients.
If they just bought a home, started a family, etc then they need an umbrella policy, ask yourself why and then explain it to them.
They really need life insurance too, but that’s another blog from this month, go look for it here!
Conclusion
In conclusion, selling umbrella policies to customers is about more than just offering additional coverage; it’s a strategic approach to providing comprehensive financial protection.
Umbrella policies serve as a vital safety net, offering peace of mind and safeguarding individuals and businesses against the unpredictable nature of life.
Throughout the sales process, the emphasis should be on education, transparency, and customization—ensuring that clients not only understand the value of the extra layer of coverage but also feel confident that it aligns with their unique needs.
The key to successful sales lies in effective communication, addressing concerns, and highlighting the affordability and versatility of umbrella policies.
By tailoring the conversation to each client’s specific circumstances, whether they are high-net-worth individuals, business owners, or those seeking to protect their assets, the aim is to create a personalized solution that enhances their overall risk management strategy.
Ultimately, the goal is not just to sell a policy but to build a relationship based on trust. This involves ongoing support, clear communication, and a commitment to helping clients navigate the complexities of insurance.
As the insurance landscape evolves and risks change, the ability to adapt and offer relevant solutions becomes increasingly crucial. By prioritizing the client’s financial well-being and delivering value beyond the policy itself, the process of selling umbrella policies becomes a partnership in securing a more resilient and protected future.
