Recently, an agent friend told me a story about a client who cancelled his insurance to switch to another agent who promised a cheaper premium. When my friend inquired how long the new agent spent talking about the client’s insurance needs, he replied, “about 15 minutes.”
Agents and brokers are risk managers, and we must spend ample time gaining a full understanding of all our clients’ needs—it’s the best way to build a large, stable book of loyal customers, and it’s simply good customer service. The “15 minutes” phenomenon threatens the quality of the coverage we provide and creates a large population of clients who may be in need of real risk management advice.
A recent Pew Research Center survey reports that nearly 40% of American households own a firearm. Avid hunters, sportsmen and collectors own more than 300 million firearms, and they’re big business: Guns and related items generate more than $11 billion annually.
But firearms are also risky business. When you consider the vast number of firearm owners and their varied property and liability exposures, uneducated agents and brokers could do a great disservice to their clients and their agency.
As a long-time insurance professional and firearm owner, I recommend the following to help protect your clients from all potential risk exposures:
- Identify clients who are gun owners. As risk managers, it’s our job to identify all the potential exposures our clients face, and that includes asking about hobbies, collections and personal passions. Leave assumptions at the door. In 2011, Gallup reported that 43% of females surveyed own a firearm. By simply asking about clients’ hobbies and interests, you will identify firearm exposures, as well as clients with wine and memorabilia collections, jewelry and other property risks that require expanded coverage.
- Know the firearm limitations for the carriers you represent. Be sure that your clients understand any sublimit pertaining to firearms in their homeowners policies. Most policies carry a maximum limit of $2,000-$2,500 for theft. It doesn’t take long to reach that limit if you are an avid hunter or collector. Breakage by dropping is a big property exposure, and it’s important to understand if that peril is covered by the homeowners policy.
- Consider a personal articles policy. Rifles and shotguns can range in price from a few hundred dollars to a few hundred thousand dollars. In many households, firearms are inherited and hold great sentimental value as well. Offering an all-risk policy with an agreed value settlement option is a great way to help protect your clients’ valuables.
- Ask about firearm-related property. Rifle scopes, binoculars, holsters and other accessories can be very expensive. When discussing firearms coverage, why not include these items on the personal article policy as well? Don’t forget to consider irreplaceable and expensive hunting trophies, such as mounted trophy bucks or Kudus from an African safari, as well.
- Require an umbrella policy or a signed declination of coverage. We recommend an umbrella policy for clients with personal exposures like trampolines and swimming pools, and we should recommend one for households with firearms too. There is no better value, dollar-for-dollar, than a personal umbrella policy. If your clients don’t take you up on the recommendation, cover your bases with a signed declination of coverage.
Clients win when they clearly understand their potential risk exposures and the solutions available to protect them against those risks. Agents win when they guide a risk management dialogue that ends with clients receiving coverage for their losses—ultimately building a more satisfied and loyal book of clients by simply asking the all the right questions.
Bill Gatewood is director, Personal Insurance Center of Excellence at Burns & Wilcox, and Corporate Vice President at Kaufman Financial Group.