Jane Doe finds the perfect turquoise bungalow with enough driveway space to park her pink chevy convertible. Her real estate agent helped her score a great deal on the place and she’s all smiles but one important factor that is often overlooked is the amount and type of insurance coverage needed to protect that new pad. Though many times insurance is an after thought, working in cooperation with local real estate agents can create better relationships and more referrals.

You can help a real estate agent by consulting their clients on specialized homeowners insurance, with a cooperative agreement that is mutually beneficial. This type of relationship is really more like a win/win/win. The real estate agent gives better service, the new home buyer get trusted insurance advice, and you, the insurance agent, creates more referral channels and possibly gains a new client.

Insurance brokers and real estate agents are on the same team in different positions on the field. As the insurance agent, you’ve got the catcher's mitt and your real estate agent contact pitches a fastball. What happens when the two don’t communicate? The catcher drops the ball on what could have been a strike. Agents and brokers have to start communicating so that clients know their options for better homeowners insurance. With an agent-broker partnership new homeowners get a great deal backed by a team of professionals that leads to more referrals.

Building a Professional Relationship

Dan Ihara, one of HomeLight’s top 1% of real estate agents in Honolulu and an expert in single family homes, spoke to the relationship between agents and brokers. “Most real estate agents are not going to get involved in insurance because they don’t have to.”

Mortgage lenders usually take care of the insurance process directly with home buyers, so unless a client makes an all-cash offer, most real estate agents don’t get involved. Even when a buyer makes an all cash offer, they are typically left to research home insurance on their own. Real estate agents can offer an added benefit to homeowners by creating a partnership with local insurance agents to understand the different insurance options available that may help protect their new investment when they need it most.. Though it’s not customary for real estate agents to take this extra step, doing, encouraging them to do so can save their clients money and result in a more integrated, “one-stop” transaction. Insurance brokers should sit down with local real estate agents and fill them in on:

  • What type of homeowners insurance you recommend for an all-cash offer
  • The different levels of coverage and what each can mean when claims are made
  • The difference between replacement value and actual value
  • Companies that typically provide the best rates
  • Explaining floodplains and insurance needs

Real estate agents can also stay one step ahead of the process by helping clients compare companies and rates themselves by using an insurance quote service like QuoteWizard.

Advising on Specialty Insurance Needs

We asked Dan if he and his team of real estate agents ever work with insurance brokers. Dan’s team takes the extra steps to work with an insurance broker to understand the changing costs of natural disaster insurance for floods and hurricanes every year. Their “relationship is really based on gathering information that we need because of flood zones and the high cost of flood insurance, that’s a major challenge for some folks because of the cost, and we want to make sure our buyers are aware of it prior to purchasing. If they buy in cash, that’s something that we want to help them with.”

Though real estate agents and insurance agents typically don’t work together, the two would better serve their respective client needs by collaborating on natural disaster insurance. Many of the same statistics are used in each discipline to assess value and risk. This relationship can save clients thousands of dollars monthly on an insurance plan that will cover them in case of emergency. Dan says,

“We do research only because we take it to a whole other level of service. And that’s where our insurance guy comes in, he gives us a report every single year, comes into my office, trains my team on what’s changed over time and really, more importantly, the costs associated with those changes. Because flood zone maps change every quarter, and so if we don’t know what those are, that could add another 2 to 3 thousand dollars a month to somebody’s holding costs.”

Specialized natural disaster insurance is an extremely important thing real estate agents should communicate with their clients. So important, in fact, we discuss it on our list of questions all clients should ask their real estate agents. When real estate agents know the cost of this insurance, they can save buyers thousands of dollars a month.

Working for Clients

Here’s the bottom line. Agents selling real property and insurance agents don’t always need to work together, but when it comes to specialized insurance for floods, hurricanes, and even earthquakes, the collaboration between real estate agents and insurance brokers is extremely important. Not only can a local insurance broker be informed about the specific changes to flood lines, earthquake risk, and hurricane probability, they understand how these changes contribute to cost fluctuations for homeowners insurance.

By communicating these cost changes to real estate agents, insurance brokers help maintain a strong relationship between agents and homebuyers. The collaboration between agents and brokers helps buyers afford and be informed on natural disaster home insurance that keeps their family, and their home, safe. And that’s a win on all fronts.


Alexa Collins is a staff writer at HomeLight. HomeLight uses transaction data to match you with the top real estate agents in your area.