Why Should You Compare Rates AND Coverages When Insurance Shopping

For years now, you may have heard that insurance is a “commodity”, and that price is the only differentiator on most policies. However, this is far from the truth, and believing it can leave you and what you’re protecting in a tough scenario. 

Most Policies Aren’t Equal

Insurance policies have coverages, limits, deductibles, and exclusions, and these aren’t always the same when comparing different policies. For example, one auto insurance policy may cover you for a wreck with an uninsured motorist. Another may exclude coverage for uninsured motorists, but have a lower premium as a result. One policy may have the “minimum” limits that can be paid in the case of an accident, while another may have higher limits. One policy’s deductible may be $500, while another may be $1,000. All of these factors affect the amount of premium you pay for the policy and comparing them solely based on the price would definitely be an “apples and oranges” scenario.

Compare What You Want and Need Instead

Instead of picking a policy based on price premium alone, determine the coverages you want and need first. For example, if you want your home’s insurance to have a lower deductible, replacement cost for claims, an umbrella for additional liability, and a bundled auto policy – don’t compare the price of that policy’s premium to one that doesn’t have the same features. 

You can almost always find a cheaper policy, but you will give up something in return. The question is what level of risk are you willing to accept? You may think you’ll never have a claim, but around 6% of home or auto insureds file a claim each year! In the lifetime of your policies, there is around a 50% chance you’ll file a claim. The likelihood that the amount you save on a “cheaper” policy will cover the difference in what your claim pays without the right coverage is very low. 

Understand the Policy

You can buy a policy online. It may be faster, and it may be cheaper. But what’s in that policy? Who is explaining it to you? Who would you call or text with a question? If you have a claim, will the online company have someone to assist you? 

Maybe none of this matters to you, and we understand that’s your choice. If the answers to these questions do matter – we’d love to help you shop for and understand your policy options!