Buying a home can be exciting—and overwhelming—especially for first-time homebuyers.
Those in the market to buy a home can have a lot of questions, like: What can I afford? What neighborhoods should I look at? What type of home insurance coverage do I need?
As an insurance agent, you can help by providing answers to those questions. In fact, insurance agents can play a vital role in the home-buying process.
In this article, we’ll cover how insurance agents can help with the home buying process and what you can provide in terms of customer care, including:
- Cultivating local community expertise to help clients make informed decisions
- Helping clients determine the cost of coverage and choosing the right policy
- Identifying potential risks with access to previous claims data
- Supporting clients throughout the life of the policy
Local community knowledge
One way independent agents can help with the home buying process is by developing local community expertise. For instance, you can provide insights into which areas have higher crime rates or are more prone to natural disasters, both of which can affect the cost of insurance coverage.
As an added benefit, agents can simultaneously build a network of industry professionals. Building a network of trusted professionals adds a degree of authority and the ability to recommend trusted real estate agents, mortgage lenders, and home inspectors in the area. Not only will these relationships benefit your clients, but they can also result in referral business.
Cost of coverage
When considering all of the costs associated with purchasing a home, buyers think about listing price, closing costs, and interest rates for the mortgage loan. However, something new homebuyers may not think about when choosing to purchase a property, is the cost of insuring it.
Many factors, such as the home’s location, age, condition, and even the homeowner’s credit score, can impact the cost of coverage. An experienced insurance agent can help homebuyers navigate these variables and more accurately determine the cost of coverage.
Agents can also help buyers find competitive rates by providing them with information that could save them money on their monthly premiums. For example, some insurers offer discounts to homeowners who install security systems or bundle home and auto insurance policies.
Going one step further, try and tailor coverages and deductibles to precisely fit the client’s budget. By helping homebuyers understand the implications of lower or higher deductibles, you can help them understand the costs associated with a loss.
A homebuyer may also want to be better educated on the coverage options available for a prospective property. And due to the number of home insurance coverages available, understanding a policy’s nuances can be overwhelming for homeowners. As such, agents can help homebuyers interpret policy terms and language.
For example, many policies don’t cover damage caused by natural disasters, like flooding or earthquakes. You should feel comfortable answering questions like: The house is in a floodplain: do I need flood insurance? There is a pool / trampoline on the property: do I need additional liability coverage? Understanding your client’s needs—and being able to respond to them with a solution—will help you develop rapport with your client.
Agents should review the coverage options available with the client and make recommendations based on the homebuyers needs and budgets. Helping homebuyers understand the limitations of coverage options can ensure they are able to afford additional costs associated with purchasing a property, mortgages notwithstanding.
Navigating insurance policies can be confusing so it's important to be prepared to answer any questions clients may have about their policy. Taking the time to explain the policy’s terms and conditions, such as deductibles, exclusions, and limits, in a way that clients can easily understand will increase the odds that a client continues to do business with you well into the future.
Review home inspections
Home inspections are critical to the home buying process, as they can uncover potential issues with the property. Take the time to review the inspection report with the homebuyer and help them understand any potential risks or issues that were identified. Not only does the information provided from a home inspection help determine the risks involved with purchasing the property, but it also shines a spotlight on the cost of insuring the home and any coverage gaps they may need to address.
Access to previous claims information
Homebuyers might not know that agents can access previous claims information for the property. It's up to you to let them know that CLUE reports exist and can provide valuable information on the home.
CLUE reports are beneficial to buyers because it lets them know they are making the right choice to purchase, or pass on, a property. From type of loss, to denials, to payouts, the insights provided by the CLUE database will prevent the homebuyer from purchasing an uninsurable home, or give them peace of mind that the property is in good shape. 1
Buying a home is a significant investment and homebuyers will likely have questions and concerns long after the closing date. Take the extra step to review your clients’ insurance policies on an annual or semi-annual basis to ensure coverage reflects home updates and / or changes in lifestyle. This ensures that not only will clients’ coverage continue to align with their needs, but your clients will also feel confident and secure knowing their home is fully protected.
You will continue to grow your business by not only helping homebuyers throughout the buying process, but also by providing ongoing support, resulting in long and fruitful relationships.
* We provide this information to help you understand insurance. Any coverage is subject to the terms of your policy. Please refer to your policy and declaration page for complete coverage details.
1 Carol Pope. “CLUE Reports.” Bankrate. 6 September 2022. Accessed 30 March 2023. https://www.bankrate.com/insurance/homeowners-insurance/clue-report/