What's the best way to sell auto insurance in a price-driven market? The answer: Understand your clients and offer them coverage that meets their protection needs and doesn't exceed their financial limits. Personal auto insurance is primarily a price-driven market segment and independent insurance agents play an important role when it comes to assisting clients in getting the auto coverage they are looking for.

However, it's a well-known fact that “this year has been a really tough year for insurance agents when it comes to servicing and selling auto insurance," says Stephanie Ehman, risk consultant, Knight Insurance Group. “The year started off with still not having parts available to fix cars during claim time—and then we got socked with double-digit rate increases." 

It is difficult to work within a market when the goalposts are continuously moving. For example, during the last several months, “the last several months we've been getting notices from carriers of their intent to slow new business growth, so many aren't writing business unless it is the cream of the crop," Ehman says.

However, there are a number of strategies agents can use to thrive in such a market.

“First and foremost, staying informed about industry trends, policy options, and coverage offerings is essential," says Steve Rivera, partner and national private client practice leader, The Liberty Company Insurance Brokers. “Customizing policies to meet each client's unique needs and educating them about available discounts is crucial for building trust."

Knowledgeable agents will be able to offer numerous options for their clients to impact the price, as well, such as “considering higher deductibles," Ehman says. “Consider their pain points, how much they are willing to pay out first before the insurance company steps in. I also educate them on telematics options that many carriers have."

Further, the availability of usage-based insurance (UBI) programs has increased, “with carriers focusing on precise mileage and usage data to establish more accurate premium pricing," Rivera says. “It's worth noting that the days of easily misrepresenting mileage to obtain a cheaper premium are dwindling, as carriers emphasize accurate data collection."

Additionally, as the market evolves and electric vehicles (EV) become more prevalent, “there will likely be a heightened need for insurance products tailored to the specific needs of EV owners," Rivera says. “This shift represents an evolving landscape in the auto insurance industry, aligning coverage more closely with the requirements of EV owners."

Essentially, “if you carry all lines and know the risk, if you ask probing questions that just aren't a checklist, you can be sure you are maximizing any discounts available and you can be sure that the proper coverage is in place in the event they really need you," Ehman says.

Central to building a long-lasting relationship with personal auto clients is effectively communicating what is happening in the marketplace and discussing what could potentially be coming down the pike.

“Consistent communication with clients to review their policies ensures that their coverage stays competitive and sufficient," Rivera says. “Additionally, providing expert guidance and support throughout the claims process can significantly boost customer satisfaction and loyalty."

Communication is crucial because a hallmark of the current auto market for clients is “frustration," Ehman says. “Too often we hear 'Why me? I didn't have a claim.' Or, 'I didn't get a double-digit raise on my social security.'"

“I try to put myself in their shoes and really focus on my relationship with them and the trust they have shown in me for so many years—I show them the value in their coverages and then offer ideas to help lower costs," Ehman adds. 

The cost of car insurance matters. And while many clients may be cautious in their acceptance of the use of technology, agents are in a position to provide guidance on telematics and real-time data.

Evolving technology “will enable insurers to assess risk more accurately, leading to personalized pricing for policyholders. This technology will also streamline underwriting, expedite claims processing, and potentially reduce accident rates," Rivera adds. “Ultimately, it promises greater efficiency and cost-effectiveness in the personal auto insurance market."

Olivia Overman is IA content editor.