Shopping for insurance should not only be about PRICE.
Stop and think about the last time you saw a bad car-accident or a house/apartment fire. Really, stop reading this blog and think about it for a minute.
Now – tell me you don’t care about anything more than just saving 15% on your insurance.
While price is important, it should not be your only determining factor when it comes to shopping for insurance. How will cut-rate insurance treat you when you require service? How will your claim be handled? What kind of relationship will you have with your agent, if you have one at all? How knowledgeable is your agent? These are all important questions to ask yourself when considering what insurance company/agent to trust with your investments.
Here are some tips to help you in the process of shopping for insurance:
1) What kind of policy am I getting?
a. Generally speaking, coverage on an auto policy is the same across the board, however be careful of companies offering Limited Liability or non-standard auto policies. These policies typically come with exclusions that limit the insurer’s liability exposure, potentially leaving you to foot the bill in an incident.
b. Homeowner insurance policies vary greatly between companies! Make sure you know what kind of coverage you are getting for the price you are paying. Lots of companies offer a Basic policy (good coverage) that will cover between certain perils that are listed on your declarations page. Some companies offer a type of Board (better coverage) or Special form (best coverage) policy. Here is a great, free resource that is available to all consumers who want a good side-by-side comparison of the different available coverages by all the carriers licensed to do business in the state of Texas: http://www.opic.texas.gov/
2) How will my claim be handled?
a. Most national insurers, will handle the initial claim processing and then will be handed off to a locally contracted adjustor if they do not have a local presence to handle themselves.
b. Some insurers now offer a concierge claims center where you can drop off your vehicle for repairs, get into a rental car and have a point person to handle your claim.
c. Most insurers partner with local body shops with excellent reputations who are a part of the insurer’s preferred network, direct payment to the shop and will even guarantee the work done to your vehicle while you own it.
d. Some regional insurers will require you to find your own body shop, send you a check for you to pay for the damage and if you need a rental, you might have to pay for it out of pocket.
3) Is it better to buy with an agent or directly from the company?
a. We may be slightly biased, but it is always better to buy from a local agent than directly with the company. Insurers trust agents to have their finger on the pulse of the community, market trends and risk factors. A good agent will assess their customer exposure, personalize a plan for coverage, always advocate for the customer and most importantly SERVICE the client. Independent agents are able to leverage their network of carriers to find the best coverage option and price for the customer. Buying direct does not always mean the rate will be cheaper and you will have no personal attention when required.
4) How knowledgeable is my agent?
a. Always ask questions of your agent; things like, how long have you been in the business? What kind of experience – claims or otherwise - have other customers had with a particular insurer? What kind of license do you offer? Are you applying all of the discounts I am eligible for?