NAFCU Services Blog

Do they have the right coverage to protect them? 

By Brook Garrity, Director of Partner Management, TruStage® Auto and Home Insurance Program 

Vehicles and homes have typically been the average consumer’s most valuable assets. With drastic increases in worth over the past year, that’s even more true than in the past.  

Although housing prices have had a largely upward price trajectory since the 1960s, they’ve taken a bigger-than-usual jump since 2020¹.  And thanks to chip shortages and high demand, prices on both new and used vehicles have increased faster than consumer prices overall (and those went up a hefty 7% from 2020 to 2021—the largest year over year increase since 1981)².

High values mean the right coverage is critical—do your members have it? 

Car and home-related expenses consume a large percentage of members’ paychecks in the best of times. They might be feeling anxious about protecting these increasingly valuable assets given today’s uncertain and high-inflation environment. And, in too many cases, members are paying too much for their coverage or don’t have the protection they actually need. 

Common reasons include: 

Buying coverage based only on price. Price comparisons from one provider to another aren’t always apples-to-apples, and members might focus on the price without registering the policy differences. Two common ways to make a policy seem less costly include pricing it to reflect a state’s minimum insurance requirements—which might be lower than the member really needs—or offering a low quote for the first six months, with the intention of bumping up the cost after that period ends (and the member is already committed). 

Not taking advantage of multi-policy discounts. Members who chase after the best price for each policy, might miss out on multi-policy discounts that could save them money overall. 

Not understanding their protection needs—or what their coverage actually delivers. Insurance is full of terms and jargon that can be confusing to members. And that lack of understanding can mean they don’t necessarily have the coverage they need. 

For instance, many homeowners think they should purchase homeowners’ insurance based on the market value of their home, when replacement value should be their guide. Or they believe they’re automatically protected against things like floods or sewer back-ups when they’re not. On the vehicle front, they might opt in for collision coverage longer than they need to or set their deductible too high—or too low. 

How can your credit union help? Educate your members 

Some of that education can come directly from you. Include home and auto insurance basics on your website and incorporate insurance into your home and auto buying seminars and webinars.  

Even more important: Make a strong insurance provider available to your members.  

Look for a provider that gives your members access to the following: 

Jargon-free product information. The best partners understand insurance can be confusing. They use clear language in all their materials and design their website and apps with built-in, hover-over definitions for unfamiliar terms. 

Transparent pricing. Look for a resource that lets members compare coverage and play with cost/benefit trade-offs. No two members have the same needs and the best providers let them find and understand their coverage options.  

Access to live help. Members love digital—and many want to handle every aspect of their insurance online. But any member, even the most digitally savvy, will occasionally run into a question or problem that can best be solved by being able to pick up a phone or meet face to face. Look for a provider that makes this possible.  

The prices of vehicles and homes aren’t likely to drop any time soon. Give your members access to coverage that meets their needs.