Homeowner’s insurance coverage from different companies can look the same…at first glance.
Sometimes they are the same, but don’t count it.
I can’t tell you the number of times I have talked to a client or a new customer and they tell me the other quote they got is the same coverage. However, when they let me look at that quote, I am often able to point out several differences in coverage. Sometimes, those difference don’t amount to much, but sometimes they do.
Here is an example that happened today…
One of my clients is purchasing a new home, so he and his wife are getting an additional quote from at least one other agent. Totally understandable. After I quote them with 6 different insurance companies that we provide, I send him a copy of the best one I have for him to review.
His email reply:
After shopping around, I have decided to choose a different company for my home insurance.
Ok, we don’t win them all (but we do win most). So, I asked him if I can see the quote from the other agent. Then, I can see if the coverage is similar.
The reason is, I typically provide the coverage our clients would want at the time of a claim, not just lowest price I can find. That means, I have included coverage options that other agents may not include, unless you specifically ask for it.
My client was nice enough to send me a copy of the other quote. Once I opened it…
So, this is my email reply back to him (everything except I removed the insurance company name.)
Thanks for sending. This is why it’s good to compare coverage and not just price.
I see 5 big differences:
1. No Earthquake
2. No Water Sewer Backup.
Those 2 coverages are about $300 on my quote. Those can be removed.
3. $1000 deductible vs $2500. I can increase mine to lower cost more.
4. Here’s a big one. [Other Company] is giving you Actual Cost Value (ACV) on your roof. ACV means depreciation. In simple round numbers, if your roof is 10 years old on a 30 year shingle at time of claim. If replacement cost is $8000, here is approximately how they will settle.
$8000 minus 33% depreciation= $5333
$5333 minus $2500 deductible = $2833
With me, $8000 minus $1000 = $7000
$2833 vs $7000, if your roof is older you get less with [Other Company].
5. The other difference is coverage amount on home. I must use the companies program to determine the amount. Not saying it needs to be as high as mine, but I am giving more.
Bottom line, coverage not even comparable. I could lower my cost about $400 if I removed the optional coverages and raised deductible.
I could write in detail about each of these coverage differences and probably will in the future. However, had we met or talked on the phone, we could have spent more time on each.
Once we discussed, then he could have made a decision on each one. Should I have it? Is it worth it? If so, then include it on his homeowner’s insurance policy.
My biggest advice is to do your research and quoting ever how you want. You can do it online, over the phone or in-person. In the end, have a conversation with an agent who is willing to provide you options and will explain the details of your coverage, but do that in-person or at least over the phone. That way you can ask discuss the price of each and decide the importance versus price.
You can still choose to not include one or all the options, but at least you are educated on the significance of the coverage AND the fact that you don’t have it. Rather than finding out when you have the claim and it’s too late.
This was first written June 2017.
He contacted me a few weeks ago wanting me to write his homeowner’s policy saying:
I would like the quote to include the optional coverages and lower deductible as we previously spoke about. I have copied the optional coverages I am referring to below. After owning a home for over a year now I have a much better understanding of the value and importance of these coverages.
He then copied my points of difference in last year’s email and pasted it into the email.
Yesterday, I issued the coverage on his home. We now have his home and auto insurance placed with the same insurance company and the home policy includes all my previous points.
What is even easier now about this process is we did this all via email and one phone call. With today’s technology we are able to do the application process through email and you only have to come into our office if you want to.
If you want to find out how your home insurance coverage compares before it is too late, click here to let me know. If you are ready to schedule a time, you can choose a time on this calendar link.
About Richie Buchanan
Richie Buchanan is the owner of ISU Insurance and Investment Group in Scottsburg, Indiana.