Collision Insurance- Why insurance agents need to consider it

If you’re sleeping with a blanket, the law doesn’t require you to cover your feet. But you do it anyway! Complete coverage is coveted, whether in sleep or in auto insurance. So why take the risk with your client’s car? While collision insurance is not mandatory by the law, insureds might benefit from having one anyway.  

Why?

Well, in 2017 alone, 40,327 people died in vehicle collisions. And with over 83% of adult Americans driving vehicles at least several times a week, they are exposed like a nerve to the risks of collision-related accidents. 

But are people buying collision insurance? 

Yes, they are!  

According to the NAIC, 73% percent of insured drivers in the US purchased collision coverage in 2016 alone, along with the standard car insurance package. 

And while those are some high numbers, remember! There are drivers out there who still don’t have collision insurance for their vehicles. 

As an agent, you can capitalize on this opportunity. You could reel in the remaining 27% of insured drivers into this niche market. 

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What exactly is Collision Coverage? 

Before we discuss the endless possibilities of collision insurance, let’s cover the basics. 

Collision insurance is a coverage that helps an insured pay to repair or replace a car if they were in an accident involving: 

  • Crashing into another vehicle 
  • Colliding with an object, such as a pole or a tree. 
  • Own vehicle rolling or falling over. 

Why would insurance agents want to sell collision coverage? 

Now that the ABCs of collision coverage is done and dusted, I want you to imagine a scenario: 

Your client is driving their new Honda Civic back home (carefully, of course). But it turns out the person coming from the opposite direction isn’t as careful, and they ram their vehicle into your client’s car. And because your client insisted they didn’t need a collision coverage earlier, they are now left to face a tremendous loss. So now what? Who takes the blame? 

Accidents are just that – accidents. Your clients may never know when they will find themselves in need of collision insurance coverage.  

And as an insurance agent, you could save them from the hassle of dealing with an uninsured vehicle collision. 

So how does one sell collision coverage to drivers? 

At first glance, collision insurance as a niche seems oversaturated. However, there are still issues that surround it. As an insurance agent, opportunities that you can capitalize on as an insurance agent. Here are a few ways to go about while selling collision insurance: 

  • Sell collision coverage to already present leads: 

While state laws may dictate that collision insurance is not mandatory, anyone financing a loan for car purchase will require it. And in 2017, Federal Reserve reported 107 million Americans had car loans. That is a HUGE number of auto loans being financed. And a market too big for you to be ignoring. You can generate a large number of leads to sell collision coverage. 

  • Clear misconceptions surrounding the collision insurance market: 

Insurance Quote revealed 68 percent of Americans believe that comprehensive auto insurance covers car damage from a collision. And with such a mind-boggling data, it wouldn’t come as a surprise if a lot of people thought the same about their basic car insurance package. 

Could you imagine the magnitude of losses that would occur without the correct insurance coverage? As an insurance agent, you can take the opportunity to pave a smooth path for your clients. Painting a clear picture of what coverages cover what kinds of damages will not only help your clients but will also help you with customer retention. 

Ignoring Collision Insurance is a car crash waiting to happen! 

The collision insurance market may prove to be a viable niche for your insurance career. Just be sure to know what other coverages you can throw into the mix to tailor a perfect car insurance package for them. 

Let us know your thoughts in the comment section! 

Learn how you can flourish as an agent after one call!

Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!