What To Look For When Comparing Quotes – Apples & Oranges

When dealing with an Independent Insurance Agent, you have many advantages.  Your agent has many different insurance companies that he or she can get quotes from, ensuring that your specific needs are met.  Most agents in an area have many of the same companies they deal with, so why are you getting quotes that vary so much? When it comes to home owners insurance, it all comes down to how detailed and meticulous your agent is when providing you a quote.  The more accurate the description of your property, the more accurate the quote will be.  When you are looking at various quotes, it is a good idea to look at the following items:

• Are the deductibles the same?
• Are there any credits (discounts) given?
• How are your contents covered?
• What is the “RCE” amount?  Are they the same?  What is the difference?
• How are “other structures” covered?

There are other specific differences in quotes, and then ultimately the policy you purchase.  Let’s go over some of the examples above.

1. Are the deductibles the same?  If you are able to ‘self insure’ to some extent, you may want to have a higher deductible, which will lower your premium.  It is important to know how much you can truly afford in the case of needing to make a claim.  If your deductible is higher than what you can realistically save, then you won’t be able to use your insurance to replace whatever it is that has been destroyed.  Keep in mind that your first quote may have a higher deductible that you will ultimately go with.
2. Are there any credits (discounts) given?  In Florida, it is important to have a current wind mitigation report done.  What this report does is shows that your roof meets the current standards, and if it does then you will receive a discount – you get credit for having that type of roof.  Often times, it is the standard practice of agents to give a quote which includes the roof discount, even if you don’t have the right type of roof.  It is just the default, especially on houses built after 2002.  If your home is built before 2002, be certain that your quote is accurate.  It is possible that a policy can be written, and bound, and then later if the paperwork isn’t accurate, you can end up with a big charge you weren’t expecting.
3. How are your contents covered?  Sometimes quotes will not include personal property.  That is, your furniture, your clothes, your electronics, your jewelry, your art, etc. are not included in the quote.  That lowers the quote, and ultimately the premium.  If the quote seems lower than others you have received, check to be sure that contents are covered — if that is what you want and expect.
4. What is the “RCE” amount?  This is the dollar amount that the insurance companies assume it will cost to rebuild or replace your home.  This is not the same as the value if you were to sell your home.  The RCE is typically done through software created by the insurance company.  It includes things like square footage, type of flooring, quality of counters and fixtures, if there are any special things in the design like bay windows, etc.  If one quote has a much lower or higher RCE than another, ask your agent why.
5. How are “other structures” covered?  Most home owners policies automatically add a certain percentage to cover “other structures”.  Other structures could be a shed or a fence.  This does not pertain to your screened enclosure.  Perhaps you have a gazebo or tiki bar?  The quoting agent will make a decision for how to do the quote, and you need to be sure you understand what is being quoted.

Insurance, including home owners insurance, is different than many products and services that you buy.  It is an actual contractual agreement between the insurance company and you, the insured.  You will be signing a contract that states you have answered the questions honestly and accurately.  Here is why the quote is important.  Not only is it telling you how much you will need to pay, it is the outline for the contract.  If the information is not accurate, it is possible that you won’t be covered if you need it.  If the quote, and the policy, includes credits to reduce premium (including things like alarm systems, hurricane shutters, etc.) and you don’t actually have those things if you need to make a claim, your claim could potentially be denied.  Don’t let that happen to you. Look at your quote and ask questions.  If it seems too low or too high, find out why.  Just be sure that you are comparing apples to apples, not apples to oranges. We are happy to review any quote you have, whether we do a quote for you or not.  There are a lot of good agents out there and we want you to have the agent and policy you want to have.  Contact us with questions!