How to Shop for Home, Auto, and Umbrella Insurance
Written by Everyday Steward Senior Financial Advisor Dan Wolthuis
With the rising costs of insurance coverage, it is often worth the time and effort to “shop around” every few years for your homeowners, automobile, and personal umbrella liability policies.
Shopping around can help you find suitable coverage at favorable pricing that yields the best value for your money.
When to Reevaluate Insurance Coverage
An important first step is confirming what types and levels of coverage are appropriate for you based on your financial and life circumstances. Your insurance agent or Blue Trust financial advisor can help guide you.
You can especially benefit from reevaluating your coverage if:
- Your premiums have increased substantially upon renewal.
- Your family status changes.
- Your property value or net worth increases, or
- You need to add a car to your policy, or you’ve replaced an older car.
It is essential to have the right comprehensive umbrella liability coverage that fits your situation. With lawsuits and claims on the rise, the expenses involved in defending yourself can be substantial. Without sufficient liability insurance, you may face liabilities that surpass your insurance limits, in which case you become personally liable for any excess amount beyond your coverage limit.
Working with Insurance Agents
We suggest making a list of three- to five insurance companies to contact for a quote. Helpful resources to generate your list of companies are http://www.nerdwallet.com and www.clark.com. Tip: look at regional rankings for overlaps between their “Best Home Insurance Companies” and “Best Car Insurance Companies” articles. Companies that appear on both would be good candidates for your shortlist.
Many of the insurance companies you are familiar with only sell their coverage through their own “captive” agents, who must be contacted directly for a quote. Other insurance companies sell their coverage through independent agents who can provide quotes from multiple insurers and help you find which one might be the best fit for you. One place to find an independent local insurance agent is www.trustedchoice.com.
Shopping Around for Insurance
To begin shopping for insurance, ensure you’re making an “apples-to-apples” comparison by specifying the same levels of coverage and deductibles across all insurers under consideration. Plan to allow 15-20 minutes for each phone call and have your current policy declarations page or needed coverage available to reference during the call.
Besides the coverage limits, other items to watch for are:
- Dwelling limit (value assigned to the house).
- Contents coverage.
- Water backup coverage.
- Medical payments coverage, and
- Any coverages that have a separate deductible.
Write down the quoted premiums for auto, home, and umbrella policies from each insurer you contact. In most cases, “bundling” home, auto, and umbrella with the same company allows for premium discounts and avoids any issues with gaps or incompatibility of the policies.
Choosing Insurance Coverage
After obtaining all your quotes for similar or identical coverage, follow these steps to decide on an insurer:
- Compare total premiums. If the projected savings are insignificant, switching probably doesn’t make sense, especially if you are happy with your current insurer.
- When savings are substantial on comparable coverage, choose the insurer with the lowest cost. In looking at total cost, be aware that some mutual insurance companies might return an annual dividend to policyholders, reducing the effective cost. Amica is one example of an insurer that does this for some policies.
- Research the insurance provider’s claims handling procedures. Discuss the company’s claims-handling reputation with your agent or family and friends who have prior experience with the company. Questions to ask include:
- Are claims typically processed promptly?
- Are there instances where claims are denied?
- Does the company have a good reputation within the industry?
These qualitative aspects can significantly influence your overall contentment with the insurance provider if you make the switch.
Reach out to your Blue Trust advisor if you have questions about managing your home, auto, and umbrella insurance coverage and cost, or get connected to a Blue Trust advisor by calling 800.987.2987 or emailing blog@bluetrust.com.
CAS00000495-08-24