Our principal agent, Kate Dawson, was interviewed and provided expert commentary for a MoneyGeek article about home insurance. With over a decade of experience from all ends of the industry, Kate was invited to share her professional experience and unique insight to guide readers through financial decisions.
Below are highlights from the article:
How can comparing quotes help homeowners save money on expensive endorsements like flood or earthquake insurance?
Just as no two houses are alike, no two insurance companies’ pricing is the same, nor are the policies they provide. Comparing multiple quotes will allow you to obtain the most coverage for the lowest price. As a broker, I work with many top-rated insurance companies, allowing me to connect homeowners with the most competitive policies. There is no better feeling than providing a client with the peace of mind that accompanies proper protection while saving them on their payment.
You are shopping to see what each company offers by comparing multiple options. Every company does not offer all endorsements, so a broker will explain the coverage available to you and guide you to the best decision to protect your home. Each insurance company prices its endorsements differently, so knowing which companies price coverage most cost-effectively is yet another benefit of using an insurance agent to guide you.
Is it possible and wise for a homeowner to compare insurance companies based on more than just cost, such as the percentage of claims that are denied?
While pricing is important, there are many other factors to consider when choosing an insurance carrier: claims satisfaction, financial stability, customer service ratings and more. Insurance is a promise, so claims satisfaction is incredibly important when considering which insurance to select.
Should you experience the need to file a claim, you have most likely had a major loss or traumatic event. From something as small as hitting a deer with your car to a catastrophic house fire, the quality of the customer service you receive from your insurance company at that time can make all the difference in the world.
I recommend researching the AM Best rating for the insurance companies you are considering. AM Best ratings have become a benchmark within the insurance industry, with ratings based on the insurance company’s ability to pay out claims, the amount of debt a carrier holds and other financial obligations.
A customer expects a timely claim payout, but it’s not always guaranteed. Understanding the average time the insurance company settles a claim will allow you to understand the expectations better. Researching a carrier’s claims satisfaction is also vital. Other customers’ experiences can give you an open and honest look into what to expect should you purchase coverage with that carrier.
Are there any common situations in which people should notify their insurance company of changes that are often forgotten or ignored, for example, taking in a renter, adding solar panels to their home or similar?
I recommend an insurance review annually, at minimum. There seems to be a general consensus from the public that you only need to speak with your insurance agent when you buy a new car or it’s time for renewal. Instead, your insurance agent should be considered a trusted advisor, in line with your CPA, lawyer and financial advisor. The better your report with your insurance agent, the more accurately they can protect you.
An annual review should entail a comprehensive review of your policies but also a discussion of what has changed in your household in the last year. Sharing this with your insurance agent allows them to adjust your protection and offer suggestions to consider any new risks.
For example, installing a swimming pool requires you to increase the amount of coverage to factor in the value of the swimming pool should you need to replace it due to a covered loss. However, an agent will help you consider the inherent risk of a swimming pool; increased liability concerns warrant raising the liability and medical payment coverage on your homeowners’ insurance and considering an umbrella policy.
Any updates or remodeling to your home should also be part of the conversation. Particularly in times of significant inflation, you must revisit the replacement cost of a home annually. If you don’t have enough coverage on your home, could you afford to rebuild your home and replace your belongings if a disaster strikes?
Additionally, updates to your home can provide discounts and significant cost savings. The size and age of your roof are major rating factors that insurance companies use to set the price for insurance policies. Damage to the roof can lead to many costly insurance claims on the house. For this reason, replacing your roof can lead to a considerable reduction in your insurance rate. Updates to a home’s plumbing, electricity and furnace are all things you should discuss with your agent.
Changes in your vehicle usage can lead to coverage gaps. For example, using your vehicle for ridesharing or delivery can exclude coverage without the necessary endorsement. For all these reasons and more, keeping in regular contact with your insurance agent will strengthen your relationship and their knowledge of your situation to protect you.