Top Auto Insurance Myths To Improve Your Sales Prospecting

Auto Insurance Myths

Auto Insurance MythsSome auto insurance myths never seem to die. You’re going to run into them when you’re cold calling and sales prospecting aged auto insurance leads. But like most sales problems, insurance myths are an opportunity.

The more facts customers have, the better decisions they can make. Fixing these pesky insurance myths will give your customers the info they need to make better coverage decisions, as well as help earn you trust and loyalty. Today, I want to show you five myths I keep hearing about and how busting these myths in your sales scripts, email marketing, and lead magnets can help your business.

1. You Can Only Change Carriers When Your Policy Expires

Most consumers purchase auto insurance in six- or 12-month terms. Over time, this standard procedure ends up seeming like the law to insurance customers. Many folks have no idea that they can shop for new coverage in the middle of a term, or that they can usually get a refund on the unused premium.

If you are prospecting aged leads, especially if you know they are far away from their x-date, make sure to work this mythbuster into your scripts and marketing materials. Let leads know they can cancel at any time, though they may be assessed a nominal cancellation fee. Help potential warm leads assess their options. In some cases, their potential premium savings may outweigh the cancellation fee.

2. Direct Carriers Are Cheaper

Today’s consumers are often looking for a way to “cut out the middleman” in hopes of lowering their costs. In auto insurance, this has resulted in a myth that direct auto insurance carriers are always cheaper than agents — like you — because there’s no agent commission. Now, while it’s true that buying direct may mean no commission fee, there’s no guarantee that savings on the cost of the policy get passed onto the consumer.

As a sales agent, you may run into this myth in the form of a sales objection. If a lead has requested a quote but doesn’t seem interested in working with an agent, this may be the reason. It’s possible a direct carrier could have a better price, but a prospect won’t know if they don’t compare both. Agents should also demonstrate the superior service that comes with working with an agent.

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3. Coverage Only Applies When the Policyholder Is Driving

Many customers are under the impression that comprehensive and collision coverage only applies when the policyholder is driving. However, most of these policies follow the vehicle, covering damages even if a friend or family member is driving. The exception here is if a particular person has been excluded from a policy for some reason.

Agents can address this myth rather easily. Your consultation is the perfect time to bring this policy feature up for the products where it applies.

4. Rates Drop for Drivers Who Turn 25

Age is an important pricing variable for auto insurers, and consumers are aware of this. However, some prospects begin to apply hard and fast rules to auto insurance that aren’t real. This idea that a customer’s premium drops when they turn 25 is one such myth. Younger and inexperienced drivers do pose more a risk, and so their premiums tend to be higher. Carriers vary on when and if aged-dependent pricing changes, but some offer discounted rates for those who’ve reached 21, 23, or 30 years of age.

It’s important for agents to step back and understand what the real need is for these leads. Customers concerned about discounted rates for 25-year-olds are concerned about discounts, not age. You may be able to win over young drivers who’ve heard this myth with other discount offers — for bundled policies, premiums paid upfront, paperless billing, and so on.

5. Comprehensive Coverage Covers Personal Property

Comprehensive coverage offers some of the best protection available for vehicle owners, but some folks believe these benefits stretch even further. A myth has sprung up that this product covers theft of or damage to any personal property in the vehicle. Not so. While a comprehensive policy covers stereos, navigation systems, and the like that are factory installed, iPads, purses, golf clubs aren’t covered.

For agents, the task is to accurately describe comprehensive policy products you’re recommending to your client. Not only does this avoid confusion and hard feelings later if there’s a claim, but it also presents a cross-selling opportunity for a homeowners or renters policy that would cover these items.

Final Thoughts

Some of these myths have been around for years. And unfortunately, they’re not going anywhere. But that’s not such a bad thing. These kinds of myths give you an opportunity to have a real conversation with prospects, educating them about features and benefits, and helping them find auto coverage that works for them.

Be sure you’re ready for these myths in your sales script and marketing materials, and if you hear even more auto insurance myths, address those as well. Your prospects will thank you.

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About Troy Wilson