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Not all insurance terms for homeowners are the same

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As I mentioned earlier in previous blogs, I find it sad that personal insurance has come to the point where many consumers buy based on funny commercials and / or the cheapest price. However, it is a struggle that agents face every day and all we can ask for is the opportunity to educate our customers about why the programs we propose are in our customers' best interests.

Example: I recently had a client who built a very nice home (3700 square feet excluding the basement) and reached out to me for a homeowners insurance quote. Our agency gave him an option that was on par with a home of this size and included many of the bells and whistles not found in other insurance policies.

He also got a quote from a competitor and reached out to me because he could not understand why the competitor's quote was cheaper.

I really do not expect customers to understand all the different coverages included in the homeowners policy, so I appreciated the opportunity to go through the quote and describe the differences to him – some of which were large.

For example, the competitor's offer did not pose a particular risk to his content; mine did. This is huge! This means that if he were to suffer a loss of his content caused by a hazard that is not specifically listed, under the competitor's program, the claim would be denied. On the other hand, a particular form of risk automatically provides coverage unless the danger is specifically ruled out (eg wear and tear, intentional loss, neglect, war, etc.). I always recommend that homeowners cover their home as well as their contents under a particular form of risk when they can.

In addition, the deductible on the competitor's quote was higher than on mine. It really makes a difference in cost, as well as a big difference in coverage for water backup that was on my quote compared to the competitor's.

Although there were some other differences, another major one was that my quote included a payment option that allows the insured to get a check on the full replacement value of the house, even if he chooses not to rebuild his home after a loss. The competitor's options did not include that either!

Homeowners insurance can be tricky, so be sure to talk to your local independent agent about your available options so he or she can customize a program that provides the protection you need at a price you can afford. Shopping for insurance on price alone can be dangerous, so trust a professional to help you with this process!

The information above is of a general nature and your insurance and coverage may differ from the examples given. Read your insurance policy in its entirety to determine your available coverage.

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