How to Handle Insurance Premium Increases
Insurance premium increases come with the territory of being an insurance professional. I have never heard someone say they love what they pay for their insurance. The fact is, most insureds believe if they don’t have a claim, ticket, or endorsement, then their insurance should stay the same every year.
The reality is, the carrier has made a contract with the insured for that term to protect their biggest assets. This means we need to train insurance teams on exactly how to handle clients who are upset about premium increases.
How Insurance Agencies Handle Insurance Premium Increases
In my experience, there are three ways most agencies handle insurance premium increases. One, of course, is my favorite. I bet you can’t guess which one…
- Wait & See: This is where the agency waits for the client to call them all spicy. This leads to high client deflection, lots of remarketing, and the agency is playing defense.
- Rate Trigger: This is where the agency proactively reshops accounts when the rate hits a certain threshold. This makes the conversation all about price and you find there is a low remarketing closing ratio so you burn valuable time. In addition, you may not be a great partner to your carriers as you’re not re-underwriting the risk.
- Proactive Renewal Reviews: This is where the agency calls renewals proactively to conduct renewal reviews to update contact information, apply discounts, increase coverage, earn referrals, and boost cross-selling. This also maintains the highest retention rates in the industry.
Can you guess my favorite? Proactive renewal reviews. They solve every major pain in insurance agencies.
Why Agencies Don’t Conduct Renewal Reviews
If renewal reviews solve so many challenges, why do agencies not embrace them?
- Time Constraints: Limited staff bandwidth prioritizes new sales or urgent client issues over reviews.
- Lack of Process: No standardized system or checklist for conducting consistent renewal reviews.
- Resource Limitations: Small agencies may lack the personnel or tools to manage proactive outreach.
- Reactive Culture: Focus on responding to client requests rather than initiating reviews.
- Perceived Low Value: Belief that renewals don’t generate immediate revenue compared to new policies.
- Client Resistance: Assumption that clients may find proactive reviews intrusive or unnecessary.
- Technology Gaps: Inadequate CRM or automation tools to track and manage renewal schedules.
- Staff Training Deficits: Employees may lack skills or confidence to conduct thorough reviews.
- Misaligned Priorities: Emphasis on short-term goals over long-term client retention strategies.
All of these obstacles can be overcome with training and process. Remember, if you don’t spend time preparing, you spend time repairing.
Why Do Clients Get Upset at Insurance Rate Increases?
It may seem obvious – no one wants to pay more for their insurance. However, it’s generally the impact the new expense has on the business or family. For example, if a business just invested in equipment and then the renewal comes in 30% higher, that can make the business owner uneasy.
The reality is, insurance is the only thing I buy every year where I am very uncertain what it will cost each and every year. Being prepared for how to handle these concerns is our duty.
Here are some reasons clients get frustrated by rate increases – this list should help you maintain empathy for clients.
- Financial Strain: Clients may already be stretched thin, and a higher premium feels like an unexpected burden on their budget.
- Lack of Clarity: Confusion about why rates increased (e.g., market trends, claims history) can lead to frustration or mistrust.
- Perceived Unfairness: Clients may feel penalized despite no claims or changes in their risk profile, viewing the hike as unjust.
- Loss of Control: Rate increases imposed by the carrier can make clients feel powerless over their insurance costs.
- Life Changes: Recent personal hardships (e.g., job loss, medical expenses) amplify sensitivity to any added costs.
- Expectation Mismatch: Clients expecting stable or lower rates due to loyalty or good behavior may feel betrayed.
- Comparison to Others: Hearing about lower rates from friends or competitors can spark resentment or doubt.
- Timing Issues: Rate hikes coinciding with renewals or other financial obligations (e.g., taxes, holidays) feel poorly timed.
- Lack of Value Perception: Clients may not see added benefits in their policy to justify the higher cost, leading to dissatisfaction.
- Broken Trust: Past assurances of stable rates or inadequate communication about potential increases can erode confidence.
When you know why clients may get frustrated, you can work through it.
How to Handle an Insured Who Is Upset About Rate
We have all been upset before (maybe even by our own insurance premium increases). When someone is upset, you want to listen to them so you can best advise them. The great news is, as an independent insurance agent, we can and do have options.
Let me walk you through our framework on how to handle an upset customer.
Step 1: Listen to Listen
When anyone is upset, they become sharp, loud, or aggressive because they don’t think anyone is listening or hearing them. When you listen to listen, you aren’t judging or trying to solve the issue, you are befriending them to connect and find a solution.
One tip: Never apologize for the rate increase. You didn’t actually cause it — show empathy, not sympathy.
When you are listening, you need to provide listening cues. Small things like “yes,” “ok,” or “I got that,” show you are listening. You will need to take notes as well. Oftentimes clients are not logical or methodical. When you take the whole situation in, you can reconstruct what is happening.
As you are listening, remember the list above, most people will relate to one of the situations above that are impacting them and making them upset about their insurance premium increase.
Step 2: Confirm and Clarify
Once the client has shared their concerns, you can piece together what occurred. Why the rate increased, what their major concern really is, and position yourself as the person who can help them. You can ask qualifying questions and connect with the client. This is also where you can share that you are an independent agency and that you do have options potentially within the current carrier but also with other carriers.
Step 3: Gratitude and Plan
Even though the client may have thrown a few jabs at you around their insurance premium increase, now is the perfect time to thank them for calling. You can use a script like this:
“Thank you for sharing your concerns, helping people like you is the best part of my job. Insurance is confusing, so I’m grateful you called so I can work with you to find a plan.”
Now, you may not be very grateful they called — but isn’t it better they call you than your competition?
Step 4: Review the Account
We never want to dive into a remarket – that is very costly from time, premium, and inspections. Instead, let’s review the account for both accuracy and discounts. By reviewing the account, you may learn new ways to adjust the policy and check to see if there are any additional discounts that can be applied.
In addition, this is your opportunity to see if the client maybe should be remarketed. You need to use your professional judgement on this.
Step 5: Confirm the Plan
If you can work within the policy, that is the best option. You avoid messy inspections, additional work, and potential E&O gaps. If you can’t, then inform the insured about what an inspection entails and how it may impact them. If they agree, then remarket the account and where possible work to increase coverages.
Sample Insurance Premium Script
Script: Handling a Client Upset About a Premium Increase
Agent: Hello [Client Name], this is [Your Name] from [Agency Name]. I understand you’re upset about the premium increase on your renewal. I’m here to listen and help. Can you share what’s most concerning for you about this change?
Client: [Expresses frustration, e.g., “This is too expensive!” or “I haven’t had any claims!”]
Agent: [Listening cues] I hear you, and I’m taking notes to make sure I understand. It sounds like [reflect client’s concern, e.g., the cost feels unfair since you’ve had no claims]. Thank you for explaining that. [Pause briefly to show empathy.]
Client: [Continues or calms slightly.]
Agent: [Confirm and Clarify] Let me clarify what’s happened. Your premium increased due to [reason, e.g., industry-wide rate adjustments, updated risk factors]. I can see why this feels [acknowledge emotion, e.g., unexpected, especially with recent expenses]. As an independent agency, we have options to explore within your current policy or with other carriers. Can I ask if the cost is the main issue, or is there something else bothering you?
Client: [Confirms concern, e.g., cost, fairness, or timing.]
Agent: [Gratitude and Plan] Thank you for sharing that, [Client Name]. Helping clients like you is the best part of my job, and I’m grateful you called so we can work together. Here’s my plan: I’ll review your account to check for accuracy, look for any discounts we can apply, and see if adjustments can lower the cost while keeping your coverage strong. Does that sound okay?
Client: [Agrees or asks questions.]
Agent: [Review the Account] Great, I’m pulling up your policy now. [Ask questions, e.g., “Any changes in your home or vehicle use?”] I’ve noted [specific details, e.g., eligibility for a multi-policy discount]. It looks like we can [e.g., apply a discount, adjust coverage]. If these changes don’t meet your needs, we could consider remarketing, but that involves inspections and potential coverage shifts. What do you think about staying with the current policy for now?
Client: [Chooses option or asks for remarketing.]
Agent: [Confirm the Plan] Perfect, here’s what we’ll do: [If staying] I’ll apply [specific changes, e.g., discount] and finalize your renewal to keep your coverage seamless. [If remarketing] I’ll start the remarketing process, which includes an inspection, and I’ll update you by [specific time]. I’ll follow up to ensure everything meets your needs. Thank you for working with me, [Client Name]. Any other questions?
Client: [Responds or confirms.]
Agent: I’m here if anything else comes up. Thanks for trusting us to find the best solution!
How Training Impacts Your Team’s Ability to Handle Rate Increases
Training insurance teams with role-playing, scripts, and coaching is critical for overcoming the challenges highlighted in the blog, particularly in handling sensitive situations like premium increases. The blog emphasizes that agencies often fail to conduct proactive renewal reviews due to staff training deficits, lack of process, and reactive cultures. By providing structured training, including role-playing scenarios, teams can practice navigating client frustrations—such as perceived unfairness or financial strain—with empathy and confidence.
Scripts, like the one provided in the blog, offer a clear framework for listening actively, clarifying concerns, and proposing solutions, ensuring consistency and professionalism. Coaching reinforces these skills by addressing individual weaknesses, building emotional intelligence, and fostering a proactive mindset, which the blog notes is essential for high retention rates and client trust.
Role-playing and coaching also address the blog’s point that preparation prevents costly repairs, such as client deflection or time-intensive remarketing. Through simulated conversations, agents can master de-escalating upset clients without apologizing for rate increases, as advised, and learn to pivot to account reviews over hasty remarketing.
Coaching provides ongoing feedback, helping agents refine their approach to align with the agency’s goals of cross-selling, applying discounts, and maintaining carrier relationships. By investing in these training methods, agencies can transform obstacles like time constraints and perceived low value into opportunities, ensuring teams are equipped to deliver exceptional service and uphold the proactive renewal review process championed in the blog.
Conclusion
In conclusion, equipping insurance teams with comprehensive training through role-playing, scripts, and coaching is essential for transforming challenging client interactions, like those involving premium increases, into opportunities for trust-building and retention.
By addressing the barriers outlined in the blog—such as training deficits and reactive cultures—these methods empower agents to handle client frustrations with empathy, clarity, and professionalism. This proactive approach not only mitigates the risk of client deflection and inefficient remarketing but also strengthens agency-client relationships, aligning with the blog’s advocacy for proactive renewal reviews to drive long-term success and industry-leading retention rates.
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