As you're probably aware, selling insurance to young people is difficult. They’re often on a tight budget and are thus careful with their money. Essentially every driver in the United States needs auto insurance, however, so knowing how to sell auto insurance to a younger audience is a must.
Be Honest About Necessity
As an insurance agent, you know that honesty is one of the biggest tools you can wield. Be honest about the amount of coverage your customers – or potential customers - will need. If an agent sells a young client full coverage with add-ons they don't need, the young driver will realize they’re paying too much. They might go somewhere else for coverage once they find this out. Be level with young drivers about the amount of insurance they need to drive legally in their state. And discuss the risks or benefits of other types of insurance. As their finances grow, so may their insurance.
Whether it's their first car or their fifth, young people will respond well if you work for them instead of against them. They want to know that you're going to do what you can to save them money. Otherwise, they're going somewhere else. Discuss the multiple discounts and ways young drivers can save money. As they grow and their financial situation stabilizes, they will add and change insurance as they need. You want to earn their loyalty from the get-go. That way, when they have kids and those kids reach their teenage years, the young drivers will come to you for insurance. Mention things like:
- Safe driver discounts
- Good student discounts
- Defensive driving courses
If your clients are young teen themselves, it may be more suitable to remain on their parents’ policy. Discuss this with the teen and their parents to find the best arrangement for everyone.
Explain The Risks And Costs
New drivers don't always know what raises their insurance costs. If they get in a wreck or get a ticket, they don't want to be blindsided by a jump in their insurance rates. Remind them that their actions behind the wheel can influence how much they pay for their policy. Pay special attention to:
- Getting tickets
- Committing other traffic violations
- Committing parking violations
- Having bad or no credit
- Being a high-risk driver
If young drivers think they don't need insurance, it's also pertinent to remind them of the risks of driving without it. Not only is it punishable by law, but also getting in a wreck with another car without insurance may cost drivers more out of pocket than what they would have paid if they were insured. It's also important to note that for drivers with no credit, paying an auto insurance bill is a good way to build credit — if they don't want to invest in a credit card.
Drivers are statistically more likely to get into a crash in the first year after they get their license. There was about $13.1 billion in motor vehicle injuries in 2017 among teens 15-19 years old. It can be a large risk to insure young drivers, since they represent the highest financial instability due to these crashes and other similar factors. Insuring such risky behavior makes insurance companies push up the rates new drivers must pay. This is one reason why young drivers hop from agency to agency trying to find the cheapest auto insurance or attempting to lower their premiums.
Be open with young drivers about the risks and costs of insurance. Educate them on the bare minimum amount of liability, uninsured motorist and comprehensive insurance they need to drive legally in their state. And help them understand their own policy and its cost.