Compare Insurance Apples to Apples

So many times, customers call saying “I want to compare insurance apples to apples”.  For most people, this means comparing the coverage, deductibles, and price.  You probably guessed this, but there’s much more to compare than that.

We just made it easy for homeowners in Alabama to compare insurance apples to apples!  Click the link below to submit your insurance document for a direct comparison quote!

How to Compare Insurance Apples to Apples

What you want to compare is not the price, but the insurance rate.  The insurance rate is what determines a price.  Here’s how to calculate insurance rate:

base premium / total insurance value = rate

Take the base premium (the price of your insurance before all the taxes and fees).  Divide that by the total insurance value (the sum of coverage A, B, C, & D; dwelling, other structures, personal property, and loss of use).  The result is your rate.  Do that with a couple of quotes, and you’ll see which one has the lower rate.  Here are some other factors you should consider about insurance.

Other Things to Compare

The rate is important, but it’s the guts of the policy that make it what it is.  There are other things to consider too; the insurance provider, discounts, exclusions, endorsements, replacement cost value, and cancellation fees.

Who you’re insured with is a big factor.  Why?  You don’t want your insurer to deny valid claims.  You also don’t want your insurer to be so new to the insurance business that they can go bankrupt.  Always research your insurance company.  Little guys like to offer low prices, but run away when there is trouble.  Many of those smaller companies are called demotech insurance companies.  That’s not to say that demotech insurance is bad; just know who you’re insured with.  If you get surplus lines insurance, make sure they’re a big name carrier.

Discounts decrease the rate.  Ask your agent what discounts are available and make sure they are applied.  Here’s a list of possible home insurance discounts.

Make sure that everything is covered at replacement cost vs. actual cash value.  Your policy might look like it’s full replacement cost when the roof is insured for actual cash value.  You need to make sure about this if it’s not spelled out somewhere on the quote.

Ask about exclusions.  Normally things like earthquake, mold, and water back up are excluded from a policy.  Flood is most always a separate policy.

Check for cancellation fees.  Your quote might not use the term “cancellation fee”.  It might say, “25% minimum earned premium”.  That would mean the company keeps 25% of what you paid and refunds you 75% if you flat cancel.  Lower cancellation fees are better.  This is usually only important if you are switching insurance mid-term, selling your house, or are changing your occupancy.

Remember, every insurance provider has their own guidelines.  Some might not be flexible enough to match each dollar in coverage.