How To Sell Insurance When Your Carrier's Rates Are High

One of the most common complaints we hear from agents is that their carriers’ high rates are negatively impacting their insurance sales. And while that may (in some cases) be a true statement, a successful insurance agent will never use it as an excuse to give up—they’ll instead find a way to either use it to their advantage or work around it.

George Elossais emphasizes that to succeed in this environment, agents have to be ready to “compete on value.” This means truly helping the client solve their problem rather than letting them get stuck on the price.

Similarly, Thomas Ntuk warns against trying to win the “fast and cheap” race. While competitors might promise savings in fifteen minutes, Thomas says going with a cheap, quick-fix option can bankrupt a customer if the policy coverage is inadequate.

In this article, we’ll provide some context you can use to understand high carrier rates and how to frame them for your prospects, as well as unpack a few insurance sales tips for working around sticker shock. With these tips, you can get back to making your clients’ lives meaningfully smoother with good insurance policies.

Tip 2: Understand that price isn’t the most important issue for all customers.

The cost of insurance is the primary deciding factor for customers about half of the time. That means price is important, but it’s not the only facet customers are considering.

Here are five things you can do to make sure you appeal to the other 50% of customers who know price isn’t everything:

1. Explain why your rates are increasing.

When you explain the “rules of the game” to the customer—that most carriers will be matching your carrier’s seemingly high rates soon—you’ve opened a door of opportunity to explain the value your carrier provides.

While not everyone will be receptive to your explanation, statistically about half of your prospects will be. These potential customers seem to respond to insurance agents who take time to share the context because it helps them make sense of the situation.

What do you say when an insurance lead objects to your sales pitch? Instead of panicking, try the four sample scripts outlined in this guide.

2. Become a resource for your consumer.

By taking the time to educate, you forge a deeper level of connection with the consumer. You’re the bridge between them and the industry, and by helping them understand the rationale behind the pricing fluctuations, you identify yourself as their “helper.”

There are no circumstances where people like to pay more, but by explaining what’s actually going on you can help them see the value they’ll get from your product.

Thomas Ntuk suggests challenging the common request for an “apples to apples” cost comparison. His logic is that if the original policy has poor coverage, matching that quote will only serve to keep the customer underinsured. As he says, just because you paid $20 instead of $40 for a tank of gas doesn’t mean you got a better deal if you only received five gallons instead of fifteen.

By slowing down your explanations to focus on what’s better about your product, you can help the customer understand that they’ll pay a higher premium and get more value in return.

Your goal here is to shift the customer’s focus away from the price they’ll pay and toward the benefits they’ll receive. As George Elossais puts it, “Sell the vacation, not the plane ticket.” In other words, emphasize the destination (financial security and peace of mind) rather than the “ticket price” of the premium.

3. Know your value propositions by heart.

In the absence of value, any price is too expensive! Agents without a convincing value proposition won’t bind any policies. Take the time to learn and deeply understand your differentiators so you can spot the instances when a customer needs something unique that you can provide.

George recommends demonstrating concrete value using the Insurance Per Dollar (IPD) calculation. By dividing the top-end liability (or the line item that would help the customer the most) by the monthly premium, you can show a client that even if your premium is higher, every dollar they spend with you buys them significantly more protection. This essentially positions you as the “Costco of insurance” where the rate improves when the customer buys in bulk.

Not by coincidence, this is also a great way to upsell or cross-sell bundle packages.

4. Provide a world-class experience.

As we discussed, people aren’t buying your insurance products only for the price, but also for the experience your agency provides.

Your specialty can vary based on your strengths. For instance you can educate your customers as Thomas suggests and ensure that your agency is always top-of-mind whenever they have a question in the future. Or, you could buckle down and commit to writing the most comprehensive, best-bang-for-your-buck policies your customers have ever seen.

Either way, you’re going to set yourself apart and become known for the quality of your service.

No longer are agents able to gain the upper hand by meeting prospects at their kitchen tables or strictly over the phone, so you have to find other ways to get and hold their attention. Fortunately, technology makes this possible. Agents who work hard and really get to know their customers can create a better experience to explain how price fits into the mechanics of their coverage; as a result, they have more prospects who are willing to buy.

You can also check out 15 Customer Retention Strategies In The Insurance Industry to learn more than a dozen easy-to-implement best practices for retaining customers.

5. Don’t be an order-taker.

If price is the only thing a prospect is concerned about, consider whether or not you’re the right agent for them. Agents who focus only on this aspect become order-takers, not value providers.

If you do let go of a client, don’t count it as a loss.

Thomas insists that letting go of impatient, price-obsessed prospects will help you become more successful in the long run. He says that by losing two out of ten leads who refuse to look past your sticker price, you gain the time you’ll need to properly educate and help the remaining eight clients.

Plus, letting go of customers who aren't the right fit will give you a break from constantly having to field uncomfortable questions about your high costs, and dropping that burden will help you show up stronger in other areas of your business. It also saves your team time spent servicing the policies of price-driven customers who have an overall lower likelihood of retaining with your agency when renewal time comes around.

If you can’t or don’t want to walk away but your carrier’s rates are truly a barrier for an otherwise great customer, George suggests pivoting to other policy lines. He recommends telling customers, “On the car insurance I agree, we don’t make sense for you today. But I can cover your family for $X per month with this life insurance policy.”

This tactic not only helps you retain a customer you might have otherwise lost, it also builds your credibility as an impartial advisor who didn’t force a bad fit when it didn’t make sense. Your customers will remember this!

Tip 3: Use your expert knowledge to explain why your customers’ objections aren’t an issue.

Here’s the secret: Most consumers don’t understand insurance! In the absence of knowledge, they can only compare price.

So if you think we’re hammering in the point about educating your customers, that’s because it’s such a useful method for closing sales. The benefits of taking your time to answer questions, understand the customers’ needs, and explain their best options pays dividends many times over.

This is just as true when it comes to handling objections as it is in your initial sales pitch.

Customers need you to educate them about their options and all the various ways you could help them. When you lay out different coverage types and policies and you explain each line item, customers will know you value their time and that you actually want to help them—not just take their money.

For most people, that kind of service is worth the higher price tag, and it’s often also effective at helping them past the initial discomfort of the unknown that causes many people to throw down objections.

Another powerful way to showcase your expertise and get around obstacles is to use Thomas’s “Disturbing the Customer” technique. He likes to ask questions like, “When you have a serious accident and you’re found to be at fault, how much do you want to pay? How much would you want the insurance company to pay?”

These uncomfortable scenarios force customers to think through hypothetical scenarios very closely. This gives you a great conversational opener to explain exactly how the customer can upgrade their coverage to make sure that worst-case scenario where they pay a huge chunk after an accident never happens.

Another great “disturbing question” from Thomas’s repertoire is, “Has anybody talked to you about how your liability limit could affect your retirement plan?” George adds to this by explaining that in many states, if you’re underinsured, the court can garnish your income, equity, and savings if you have to pay for a claim. By linking better insurance coverage to the protection of your customer’s future retirement, you’re showing them why paying a higher rate now could be a necessary safeguard against problems later.

Tip 4: Use your resources.

Finding the right customer base is a critical and foundational first step in perfecting your insurance sales strategy, but doing it alone can be difficult. That’s where EverQuote comes in.

We offer high-intent 100% real-time generated leads—people who come to our website who are already looking for insurance products—and then we provide that lead information to agents like you.

Better still, you’ll get each new lead within seconds of the consumer submitting their information online. That means you can strike while the iron is hot and maximize your chances of starting a conversation before an agent with a cheaper price tag scoops the lead out from under you.

This method works for thousands of agents (including top agents like Perry Olson), and it could be what helps your agency reach that next level of success. You can find out more about our process here.