If you’re thinking about shopping for a new insurance carrier, there are important differences you should consider. It seems that every insurance carrier is offering the best price – but that’s impossible. The claim to a low price can grab a prospective customer’s attention. In reality, all companies in all industries compete for your business in three ways: Price. Service. Quality.
We would all love it if we could pay low insurance premiums that never increased at renewal, wouldn’t we? Unfortunately, that isn’t the reality we face. Distracted driving and increasingly severe weather1 have driven claims payouts higher. The insurance company has a higher cost of doing business each year, and a prolonged low interest rate environment have negatively impacted insurance companies.
Every carrier has a niche market and can offer competitive premiums for their ideal client. Longevity with a carrier can lower your rate and often provide you loyalty benefits for being a long-time customer.
Carriers base your rate on many personal factors. Your age, sex, location, marital status, credit score, vehicles, driving history, etc., all go in to determining your rate. Many times consumers will say things like, “my neighbor is paying half of what I’m paying for insurance.” That may be true, but we don’t know the specifics of their policy, or how their personal information may differ from yours.
When getting quotes from a new company, provide as much information as possible, so the proposals they prepare are accurate. Inquire about the discounts they offer to see if you are eligible. Most carriers offer price incentives for premiums paid in full or monthly payments that automatically draft out of a checking account. Because each carrier offers different discounts, be sure to ask if there are other ways to reduce your cost.
Have you ever dined at an amazing restaurant where the food was spectacular, but the service left you with a bad taste in your mouth? (pun intended!) In today’s world, service is becoming a lost art. So many things can be done through automation that the personal connection is lost. It matters who picks up the phone at claim time or when you need recommendations on coverage options. Mistakes buying insurance can be devastating. Because you are insuring your most valuable assets (even your life!), consider the person who will be taking care of you. Like all industries, insurance policies change and evolve. It can be invaluable to have a trusted professional answering your questions. Insurance rates are easy to shop, but trusted advisors are not.
Not every carrier has licensed agents – many companies work via a call center environment where you will speak with a new person every time you call. Don’t be afraid to ask questions. You’re interviewing the new company just as much as they’re interviewing you.
In addition, consider the service from the claims department. When it comes time to file a claim, you want to feel confident in your carrier to provide excellent service and prompt claim resolution. There are websites who rate insurance based on different factors. You can do you homework and look into some of these top carriers before you contact them for a quote.2
Gucci said “Quality is remembered long after the price is forgotten.” Strangely, nobody ever seems to ask about price when their home has burned down, their car was totaled in an accident, or they lost a loved one due to a premature death.
Carriers are not create equal. Some provide quality policies with robust coverage and others offer basic policies that require more coverage be added through endorsements. Have you ever read an insurance policy from cover to cover? Probably not – you would be nodding off by the second page. Because there is a plethora of information in a policy, having a clear understanding of how your assets are covered is not easy. It is important you trust who you are working with, so they can explain the details of your coverage.
You don’t want to have a nasty surprise when you file a claim and discover there are gaps in your policy. While you’ll never be able to insure against everything, there are quality companies with quality policies to best suit what you need.
Because insurance is intangible, buying it does not give us the excitement or instant gratification we get when purchasing a new car, home, or experience. However, when we take our time to consider all of the details, there are great benefits to shopping your insurance and placing it with the carrier you feel best suits the needs of you and your family.