Is the roof over your head about to cave in? Did you just change jobs, get married or start planning for retirement? In situations like these, most people think about their insurance.
Life changes are a great time to evaluate insurance coverage (for customers and insurance companies alike), but waiting until the last minute to make changes is never a good idea. Think about extreme examples, like not remembering you need mortgage insurance for your new home until the day you’re closing on your loan. Or assuming you don’t need life insurance until you’ve been diagnosed with a serious illness.
We can’t easily change tendencies to procrastinate. But understanding common insurance mistakes can shine a light on what individuals need to consider – and give insurance carriers an opportunity to stand out.
To uncover some of the top insurance mistakes people make, we spoke with SAS insurance expert Franklin Manchester, who has real-life experience as an underwriter (hint: his advice is worth heeding).
Insurance mistake #1: Basing decisions on price alone
Think about the adage, “You get what you pay for.” That can apply to insurance just like any other area of life. People sometimes shop for insurance coverage based solely on the premium (price) because they assume all insurance is the same. But that’s the wrong approach, Manchester says.
So, what should insurance customers consider besides price?
For starters, Manchester says, go online and research insurance companies you’re considering. Look at reviews related to claims payments, especially. Check social media to see how reputable an organization is, too.
Beyond that, visit your state’s Department of Insurance website or the regulator's website. These sources provide trustworthy information about insurance companies, including recent market conduct examinations (or state audits) and customer complaints that you can query. This research will show you how well that company is fulfilling its promises.
Insurance mistake #2: Not regularly shopping for insurance
Yes, we just said you shouldn’t base your decision on price alone. All the same, if you’d like to cut costs – or just make sure your rates and coverage are competitive – make a habit of shopping around for insurance regularly.
Manchester says it’s good to shop around every three years or so. And remember that while you may find a better rate, price is just one consideration.
Don’t overlook the details in policy language. For example, does your homeowner coverage include replacement cost? Have certain perils been stripped out? You can’t assume you’ll have coverage for all perils because some – like flooding – may not be covered.
Consider insurance limits and deductibles, too. And remember, you may be able to double liability insurance coverage for just a few extra dollars each month.
To stay in sync with recent or upcoming changes in your life, you should evaluate whether you need a new policy or can update your existing one by increasing the coverage or reducing limits.
Be sure to look at online resources as you make these decisions – but don’t forget the insurance agent. Agents are a fantastic way to get insight into coverage and policy details.
Failing to ask your insurance company about discounts is one of the most common mistakes people make. Franklin Manchester, Global Insurance Strategic Advisor, SAS
Insurance mistake #3: Not asking about discounts
Insurance companies have done the market research, so they know customers love discounts. And even though carriers advertise discounts, customers still may not know about them. In some cases, discounts are simply not applied when they could be.
“Failing to ask your insurance company about discounts is one of the most common mistakes people make,” Manchester says. That can happen because people don’t realize discount options exist, or don’t know they can ask about discounts with their existing policy.
Many insurers offer discounts, including:
- Good student discounts for college-age children.
- Military discounts.
- Affinity organization membership (like alumni or trade associations).
- New home discounts.
- Protective device discounts (like an alarm system).
- New roof discounts.
Bottom line: Do your research and ask your current agent about discounts. And look for carriers that offer discounts the next time you’re shopping for coverage.
Insurance mistake #4: Not taking advantage of extra perks and educational resources
Your insurance policy is just one aspect of your relationship with your insurer. On top of discounts, many insurers offer a range of educational materials and services. To get the most out of your coverage, take advantage of these options and explore the perks each carrier offers as you shop for insurance.
These days, insurers offer a wide range of services and educational information that position you as a better risk (which could mean “lower premium”). Here are a few examples.
- Some insurers partner with IoT companies that provide devices like fire prevention sensors or water leak detectors.
- Some offer subscription services with digital contractors. That allows you to connect through a video chat with an expert who can show you how to make basic home repairs, like fixing a minor leak.
- Others have started expanding into broader areas, like health and fitness.
You’re indeed paying your insurance premium for the protection, which is valuable in and of itself. But just by visiting an insurance company's website, you can discover a wide range of additional member services that are available to you
Insurance mistake #5: Not looking for a personal insurance agent (and failing to rely on their expertise)
While many insurers use chatbots for first-line customer service, you shouldn’t assume you can't get personal advice from a real-life agent.
Customers today often forget about the insurance agent. Most insurers have deeply knowledgeable, customer-facing professionals who are engaged with their communities. These agents understand the dynamics of the locale they support, and they can be a make-or-break part of the customer relationship.
Insurance agents can give you “the rest of the story” (reference Paul Harvey) when it would be hard to get that type of answer from a chatbot or the company’s website. They're the ones who can guide you through processes, like customer onboarding or claims, and keep you in the loop about what's going on.
So, seek out and nurture that personal touch for the best possible experience. This is especially true if you’re purchasing coverage through a digital channel, Manchester says. If you have an opportunity to request a local agent, always do so.
Will AI replace insurance agents?
It’s great to know insurance agents are here – at least for now. But when we think about companies trying to reduce costs and automate customer service, it raises the question: Will insurance agents (humans) be around for the long run?
“I would hazard a guess (a little insurance joke there),” says Manchester. “We will always have people in the insurance process. But it will evolve. There may be fewer agents in terms of headcount and storefronts, and agents may become independent contractors – but they’ll still be licensed insurance professionals. In my opinion, the need for person-to-person interaction doesn't go away, at least not in our lifetimes.”
Data analytics, artificial intelligence and agentic AI are all levers that insurers can pull to get better outcomes. Franklin Manchester, Global Insurance Strategic Advisor, SAS
With knowledge of consumer mistakes, what can insurers do better?
According to Manchester, the number one mistake on the part of insurers is a lack of empathy. The customer is not a number; each person deserves special attention. But it’s easy for overworked professionals to forget that.
Whenever an insurance professional is interacting with a customer, it could literally be the worst day of that person’s life. It’s easy to feel annoyed or frustrated by yet another new policy application, claim or customer service question. But that person in front of you or on the other end of the phone really needs you, the company representative, to be empathetic.
Insurance companies should assume responsibility for providing education, training and a supportive environment for their teams – such as training in empathy, customer service and stress management. The ability to establish a great working environment is what makes some insurance company cultures great, while others are just so-so.
Typically, carriers with great people and cultural programs achieve better business results. That means higher customer retention, better claims satisfaction scores and increased revenue. But it isn’t easy to accomplish – and its importance is sometimes overlooked.
How can insurers use technology to help address these issues?
“Data analytics, artificial intelligence and agentic AI are all levers that insurers can pull to get better outcomes,” Manchester says. Consider the complexity of the processes in insurance claims, underwriting and customer service. They are multiple steps long, and some of them take days, if not weeks or even months.
An insurance company will obviously ask if those 10, 100 or 1,000 steps an employee needs to take can be replaced by technology. “I tend to think of the future insurance professional as an agent supervisor – that is, a supervisor of AI agents,” Manchester says.
Those AI agents will own certain parts of the process, allowing the insurance professional to make decisions faster, with explainability and transparency, so they can defend the decision.
Claims example #1
Consider a claim submitted by a customer whose roofing contractor advised them to file for reimbursement from hail damage. In this case, the roof was very old.
In a traditional scenario, this claim might be denied – but only after a series of steps and costs incurred along the way.
First, the insurer will send an inspector to the property. If they find an old roof, they may ask the customer to replace it – and then deny the hail damage claim or pay only partially. Filing the claim will also trigger the underwriting department to reevaluate this customer’s risk, which could result in another change.
If the customer does not replace the roof, their insurer could cancel the policy. And in the future, it will be harder to get new insurance because any other insurance company can see these records.
Claims example #2
In a similar scenario involving AI technology, the insurer receives the first notice of loss about the roof damage and uses a natural language processing (NLP) and GenAI tool with agentic AI to quickly take the following steps:
- Research the contractor and his company, asking: Is this company and individual reputable, based on online information? Have there been complaints or legal proceedings?
- Check weather records for this customer’s location at the exact date and time noted in the claim, then ask: Did hail damage occur here at the time stated? How severe was it?
- Check satellite imagery to look at the roof to see: What is the status of the roof, and does it truly have hail damage?
With AI, insurers can take these steps in minutes through a conversational interface, without sending an inspector and without incurring extra cost. Then they can quickly communicate their findings with the customer. From a customer perspective, this means you are better informed. From a carrier perspective, you have saved money and created an engaging customer experience.
“That is the future I see,” Manchester adds. “A future where we get to use technology to augment what people already do really well, for great customer outcomes. That’s the future I would like us to strive for.”
