Question

A customer service representative (CSR) receives a call from a customer whose homeowners policy has been canceled as a result of her loss frequency. She is angry because some of the losses were not covered, some losses were below her deductible, and only one loss was of significant value. Which one of the following is the best way for the CSR to respond to this criticism while working to retain the customer?

A. Place coverage with another insurer that is willing to accept the customer's loss history at a higher premium
B. Refer the customer to an agency specializing in providing coverage to customers with a high loss frequency
C. Be empathetic while explaining that all losses have the potential of having significant value, and try to negotiate a renewal with a higher deductible
D. Encourage the customer to express her anger and listen empathetically

Answer 1

The optimal response from a CSR to a customer with a canceled homeowners policy due to frequent claims is to express empathy and attempt to renegotiate the policy terms with a higher deductible, showing understanding and providing a viable solution.

Step-by-step explanation:

The best way for the customer service representative (CSR) to respond to the customer whose homeowners policy has been canceled due to high loss frequency is to be empathetic while explaining that all losses, whether covered or not, contribute to the insurer’s risk assessment. Option C: Be empathetic while explaining that all losses have the potential of having significant value, and try to negotiate a renewal with a higher deductible, would be the most effective approach. This not only shows understanding of the customer's frustrations but also offers a practical solution that maintains coverage while adjusting the terms to reflect the customer's risk profile. Insurance companies often have to balance the risk presented by a policyholder with their desire to retain customers, hence they might offer policies with a high copay or a high premium with a lower copay, depending on the individual's risk and past claim history.