But I don’t want to file a claim because my insurance company is just going to raise my premium!
This objection stands between you and signing a new customer more often than we’d like to admit. And I’ve been hearing this more and more in the busy season selling hail, wind, and hurricane-damaged roofs.
The homeowner’s right there, BUT we need to get them over the edge. And they don’t want to do it because of this one objection.
So, I’m going to teach you how to overcome this common objection in door-to-door roofing sales.
And in my objection handling formula, which is part of my all-in-one sales training, sales strategy, and sales system called the Roofing Sales Success Formula, I teach that all objections we ever hear fall into three categories. Those three categories are:
- Trust: The homeowner must trust you first.
- Need: They must need a new roof.
- Money: We must overcome the money issue.
So, trust, need, and money are the three objection categories — the three dominoes — we need to knock down in order to get the sale. We have to:
- Develop trust
- create the need
- Overcome the money issue
If we follow this path, we can WIN the deal.
Again, all objections will indicate that a homeowner doesn’t trust you. They don’t think they need a new roof or your services on the insurance side, or it’s a money issue.
Now, with this insurance premium objection, they’re pretty much focused on the money issue. Saying, I don’t want my premiums to go up, means those premiums will have to come out of their pocket. After all, they’re going to be paying for this roof one way or another, right?
And, hopefully, by now, we have:
- Developed some trust with that homeowner through a conversation
- Created a need for that new roof
The ONLY thing standing between you and them is this money piece.
So, I’m going to give you the tools and resources to have a conversation with a homeowner and overcome this objection.
Welcome (with an Upfront Offer)
First, I want to say welcome or welcome back. My name is Adam Bensman, The Roof Strategist. I am really excited to have you here.
Everything I do here — and on my YouTube channel, on my podcast (on Apple and Spotify), and in my programs — is designed to help you and your team smash your income goals and give every customer an amazing experience.
If you’re interested in more roofing sales training and programs, check out my Roofing Sales Success Formula. It’s the same training used by thousands of folks, including quite a few of the top 100 roofing companies in the U.S.
Also, I’m honored to be the official sales training partner of Owens Corning. So, if you’re an Owens Corning contractor, please reach out. I’d love to hear from you.
Now, let’s get to this insurance premium objection and how to overcome it.
There’s A LOT of misinformation out there. So, I want to distill this into the most accurate information I possibly can. First, though, I have to share this disclaimer.
I am NOT an attorney. I cannot give legal advice. I’m NOT an insurance agent. And, most importantly, you need to be aware of UPPA laws (Unlicensed Practice of Public Adjusting laws). Those laws stipulate that:
- We CAN NOT talk about claims or interpret policy coverage details.
- We CAN NOT provide any sort of advice along their policy or coverage.
So, the information I’m sharing with you is for educational purposes only. It’s for you to digest and communicate in a style and manner that works for you and that is fully compliant with UPPA laws, your local and state laws, etc. In other words, this compliance is on you.
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Roofing Sales: Why Do Homeowners Think Premiums Will Go Up?
I want to break down exactly why homeowners think their insurance premiums will increase. Then, I’m going to teach you:
- How to have this dialogue with the homeowner
- How to get the right information in a homeowner’s hand
- How to put it all together
First, though, let’s talk about the different types of claims that can be filed for a roof.
Roofing Sales Claim Type #1: Negligence Claims
Negligence claims are filed when a homeowner could have done something to prevent some loss.
Example: Let’s say your front sidewalk is cracked. The crack started because the concrete’s settled, and it gets really big. Then, one day, a little old, lady walks by, and she trips, falls, and breaks her wrist. When the insurance company gets involved because there’s a lawsuit, the insurer will say, “That’s a 2-inch crack you knew about. You had to step over it all the time. You should have maintained your property so that no one would get injured on it.”
Again, there’s something that could have been done to prevent that accident and the injuries. Here’s another example.
Example: One of my cousins drank too much and got sick in the upstairs bathroom sink. So, she had the water running to clean up, but then she went back to sleep without turning the water off. And she slept for a really long time. When she finally woke up and went downstairs, she saw water pouring through the ceiling because the faucet had been on the whole time. Of course, that resulted in an insurance claim. And that insurance claim is negligence because, of course, she shouldn’t have left the water on.
Negligence claims are handled differently by insurance companies.
And the same thing goes for an auto claim too. People look at car claims, similar to homeowner claims, but they’re actually quite different.
So, if someone were to crash their car — and if there were something that the driver could have done to avoid the crash — they’re probably going to be at fault. If they are, their premiums are going to increase.
Roofing Sales Claim Type #2: Act of God Claims
On the other side of the coin is an Act of God claim. In fact, the language, “Act of God” or “Act of God events,” is very often written into insurance policies.
Act of God claims are a category of insurance losses or types of insurance claims that are beyond any reasonable control of a homeowner.
That means a homeowner could NOT have prevented hail, a windstorm, or a hurricane from coming.
Now, if they left the window unlocked and someone came in and stole some expensive jewelry, they could have done something to prevent that by having better security, keeping the window locked, or whatever.
So, with an act of God claim, the homeowner kind of gets a pass. It’s an acknowledgment that there’s really nothing they could have done to avoid or prevent that loss.
Consequently, by definition, insurance carriers CAN NOT increase your premiums due to an act of God claim.
Now, this may open up a can of worms. And I’m going to qualify this in a moment to talk about how and why premiums often do go up (whether or not homeowners file claims).
With an act of God, however, the homeowner cannot do anything about it. The carrier can’t say, “You filed the hail claim, so your rates are going up.”
Now, of course, there are other ways insurance companies can go about increasing premiums, which we’ll talk about that in a minute. Still, whether or not a homeowner files the claim probably will NOT change whether or not their premiums go up.
Likewise, on the other side of the coin, the insurance company is going to say you ARE liable — and they WILL raise your rates — for negligence claims, like those that involve:
- Small fires
- Flooding the house because you’ve left the sink on all night (like my cousin)
And those rates will be higher for homeowners who have filed more negligence claims versus someone who’s only filed one negligence claim.
So, the frequency of claims is almost more important than the type or the amount of the claim.
That’s the big difference. With an Act of God claim, homeowners didn’t ask for the event or losses.
Roofing Sales Claims: When & Why Do Insurance Premiums Increase?
Now, let’s look at why premiums increase, before tying everything together to give you an effective plan of attack to overcome this objection.
Let’s say there’s a neighborhood with six houses and four of those six homeowners file insurance claims (shown by the “X” in the image below). That’s most of the neighborhood filing claims.
Now, when insurance companies have all these claims coming in, what’s going to happen to the insurance premiums in that area?
Premiums are going to go up because they go up pretty much every year, just like health insurance does.
After all, no one sees health insurance premiums going down. Everyone pays more on health insurance. It just goes up year after year, and the same thing is kind of true of homeowner’s insurance too. It just goes up year over year, whether you use it or not.
The difference is that:
- With Act of God claims, insurance companies can’t raise premiums as a direct result of those claims being filed.
- With negligence claims, premiums CAN be raised as a direct result of these claims being filed.
Background: 2 Schools of Thought on Insurance Premium Increases
Now, I want to get into a little more background knowledge. There are two schools of thought about why insurance premiums go up:
- The frequency or the number of claims filed by a homeowner can increase premiums.
- The payout or the amount of those claims can drive up premiums.
It’s very difficult to pinpoint exactly what drives premiums up because we’re now digging into profitability and the backend of how insurance companies work. Of course, we have an idea about it, and we can guesstimate it. But when we’re talking about the sums of money that insurance companies have at their disposal, I don’t think we have all of the facts.
So, I want to break down what I have heard from folks who’ve been in the insurance industry for 40+ years.
I’m hearing that carriers are more concerned about the number of claims filed than the dollar amount.
Example: An Act of God Claim vs. A Negligence Claim
Let’s say that a homeowner has a $500,000 home and they have never filed a claim before. Then, a severe storm hits, causing $45,000 of damage. So, they have:
- A $45,000 Act of God claim, meaning there’s nothing they could do about it
- No claim history, meaning this new claim is the only one on their record in the last three years
On the other side of the coin, let’s say another homeowner has filed three different claims in the past, including:
- A $10,000 claim filed for lost jewelry
- A $10,000 negligence claim for a small kitchen fire that started because they left the oven on
- A $25,000 liability claim for a slip-and-fall accident at their house
In total, both homeowners end up having $45,000 of insurance claims and payouts.
Now, which homeowner is the higher liability?
Obviously, it’s the homeowner who’s filed multiple negligence claims. The insurance company in that scenario is probably thinking, When is it going to end? When is the next claim going to be filed?
So, my understanding is that carriers are more concerned about the frequency of claims versus the value of the claim.
It’s similar to the driver with several speeding tickets versus the driver who only has one. The insurance company is looking at its liability exposure.
Again, the real difference here isn’t with the dollar amount. It’s on the liability side of things and how that relates to a particular homeowner.
Could their rates go up as a direct result of filing the Act of God claim?
By definition, no. However, the carrier could decide to cancel or drop them. So, you want all of the information because most of us in roofing sales glob onto the Act of God claim, assuming there’s nothing for the homeowner to worry about.
And while insurers cannot directly increase rates because an Act of God claim has been filed, it’s important you have more information.
So, how do you overcome this?
Let’s break it down into a couple of steps.
Roofing Sales Strategy #1: Ask the Open-Ended Question
When we ask a simple open-ended question, like the following, we get a better idea of how the insurance company will likely respond to a new Act of God claim.
Hey, Mr. Homeowner, I understand that you’re concerned about your premiums going up.
Let me ask you this — how many claims have you filed in the last three years?
Their answer will let you know if they’ve had a whole bunch of claims in the recent past.
If they say, “Well, we’ve never filed a claim,” great!
We’re going to go straight in and say, “Hey, my understanding is that on an Act of God claim…”
Then, we can start talking about that in more detail.
Roofing Sales Strategy #2: Do NOT Give Policy Advice
This example is important because UPPA laws prohibit us from giving policy advice.
Now, we do NOT want to use any absolutist language, and we do NOT want to make certain statements that give policy advice.
Here’s what we can say instead:
My understanding through serving lots of homeowners through this process is that there’s some language that indicates the type of claim that you’re filing is an Act of God claim.
That means there’s absolutely NOTHING that you could have done to prevent this from happening.
And if you’re concerned that your rates will go up, look into the details of your policy and your coverage either on your own or with your insurance agent.
Of course, we can also simply tell the homeowner to ask the insurance company directly too because:
- We found damage on the roof.
- There’s a need for a new roof.
- We can put the ball back in the court, saying, “Hey, this is really important. Go do your homework.”
Likely, they’ll find the Act of God language in there, and then they’ll proceed with filing that claim.
So, again, advise the homeowner on where to turn and advise them to ask their insurance company questions.
Now, I know many of you may be panicking when you hear me say “ask their insurance.” You may be thinking:
We can NEVER do that because the insurance carrier is not going to give accurate information. They’re going to stonewall and do everything they can!
Yes, they may. So, we want to encourage the homeowner to get the proper information by saying something like:
Can you please send me or direct me to that language in the policy?
That way, the homeowner can look at it with their own eyes because there could be a difference between what the carrier or the person who answers the phone says versus what’s stated in the actual policy language.
Again, I just want to add that caveat as you sit there thinking:
Hey, Adam, but don’t put the carrier in it because they’re going to give out false information and freak out the homeowner, so they don’t file a claim.
Yes, that could happen.
But if you wanted, you could follow that claim and support the homeowner through that conversation.
Recap: How to Overcome the Premium-Hike Objection in Roofing Sales
Now, you know how to respond when you hear homeowners object with, “But I don’t want to file a claim because my insurance company is just going to raise my premium!”
The key things to do are to:
- Understand there are two different types of claims.
- Communicate to homeowners that home insurance is different than auto insurance, even though they can be similar in some ways.
- Explain how they categorize losses differently.
- Let homeowners know that they will likely see an increase in their homeowner’s insurance due to the volume of claims. Just like health insurance premiums, homeowner’s insurance premiums can go up regardless of whether they file a claim or use their insurance.
- Start to overcome this premium increase objection by first discovering how many claims they’ve had and then, educating them about your direct experience.
- Advise them to directly reach out to their carrier, agent, or claims department and ask, “Hey, I have damage to my roof, and I want to get this claim filed because I believe there’s enough damage for us to do it. And it makes sense. But my one concern is that my premiums will go up. So, I want to understand the language and my policy on this Act of God to see if it can go up because of this or not. And can you please send me the direct language?” Again, this is your absolute last resort, but you have it ready if you need it.
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Thanks for joining me, and I look forward to sharing more with you in the next blog.