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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2016

Ensure Customer Loyalty by Making Smart Referrals

Choosing the right insurance agent as a partner helps to build client trust and future business

Ensure Customer Loyalty by Making Smart ReferralsHomeowners insurance is an important part of home protection that homebuyers need to consider. Although estimates vary, a large percentage of American homes — up to two-thirds — are underinsured, leaving millions of Americans vulnerable in the case of an unexpected disaster.

As a mortgage originator, you understand how much your clients value their investment. You can help your clients find the insurance plan they need by providing them with a referral to an agent they can trust.

When your client asks if you know an insurance agent, and you tell them they should use their current relationship, you could be missing a huge opportunity to grow your business. In addition, the current agent may not be providing the level of service and speed you need to get to closing. Anything you can do to add value will separate you from the competition.

Incentives to refer

There are several important reasons why you should provide your clients with an insurance-agent referral:

  • Smooth closing: Your clients have spent weeks, months or even years looking for the right home. Once they find the right place, you do everything in your power to make the mortgage process easy to ensure the deal closes on time. One important step in that process is to refer them to an insurance agent you trust, one who knows the business and understands the importance of your referral. If you have an insurance agent whom you trust, you can expand your team to ensure a smooth closing for your client.
  • Referrals for you: If your client asks you to recommend someone who can handle the details of insuring their new home purchase, and you tell that client to chat with his or her existing broker, you are missing an opportunity to grow your network and increase referrals back to you. Find and recommend an insurance agent who is respected and well-connected. They likely know Realtors, closing attorneys and others in your profession with whom you can team up to develop new leads.
  • Options for your client: When you helped your clients find the right mortgage plan, you didn’t tell them you had one option. Why, then, would you tell your clients to go to their existing insurance broker to develop a homeowners insurance plan? Give your clients options. Tell them you know a local agent who has worked with you before, knows your team and will do independent research based on your investment. Who wouldn’t want to hear options to protect the largest investment in their life?
  • Control: Everyone has lost a deal when it is least expected. You’ve built rapport with clients, found the best rate available, learned about their families, and then you get an e-mail from the clients letting you know that they have decided to go with a different originator for their mortgage. What happened? Somewhere along the way, the clients felt a lack of trust. One way to stop shoppers is to expand your network. Find an insurance agent who can be an extension of your team. When that agent receives the referral from you, the individual’s first contact with your clients will be filled with praise for you and your skills. The more your clients hear positive messages about your abilities and your team, the higher the likelihood that those borrowers will stick with you until the closing, and also refer friends to you in the future.

Team-based approach



Insurance Binder

An insurance binder is a written commitment from an insurance company to provide insurance coverage for property such as a home. It serves as a temporary proof of insurance that "binds" coverage until a permanent policy is issued. It can be issued by the insurer or its agent and normally, in the case of a home, is valid for 30 days. The binder document details the property description, coverages, premium, policy period and mortgage information.

The market is telling everyone to shop and find the lowest rate, but no one has the time to do it in person, or even on the phone. The biggest outlet for shopping is the Internet. If that is how your clients found you, there is a good chance they expect the lowest rate.

When your clients are referred to you by someone you trust, keep the train going and refer them to an insurance agent who you can call a teammate. You’ll feel better about the transaction, and you will know your clients are with a person, not an online provider that you’ve never worked with before. How can you ensure an accurate insurance binder (a proof-of-insurance document) for your closing when your clients choose an online provider?

Finding the right insurance agent is important. If you meet the insurance agent the right way, your long-term relationship has the best chance of success. Think about how your clients meet you. Are they referred to you, or do they find you online? If they are given your name by someone you trust, you will want to continue the trend. You should ask your other referral partners whom they turn to when they need insurance advice.

Find an insurance agent who can be an extension of your team.

When you go out to networking events, pay attention to whether there are any insurance agents present networking with Realtors, attorneys, financial planners and other people you get business from on a weekly basis. It is important that the insurance agent you tap as a referral partner attracts business that can compliment your work and customer base. Your clients are the most important piece of your business, so take your time and find the right fit for their needs.

• • •

Providing an insurance referral to your clients can be one of the most helpful and important services you can offer when it comes to ensuring that a homebuyer is poised to enjoy a happy future in a new home. Find an insurance agent you can trust and you’ll fly high this year.


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