Insurance? - Page 2

SARAFIL · 10-05-2011, 05:07 PM

This is an area I now know a lot about. I'll post some more thoughts when I get home... But bottom line, shop around. And I recommend an independent (represents multiple brands) vs. captive (allstate, nationwide, farmers, state farm) agent bc they can shop you with many carriers while a captive only has one.

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SARAFIL · 10-05-2011, 05:12 PM

Oh, and Chubb is $$$ but they are THE carrier of choice for high value homes-- they do a better job in this space than anyone else. "High Value" typically meaning a home with "coverage A" of $1,000,000+. Below that, you're probably paying a lot extra for bells and whistles you might not need.

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ff · 10-05-2011, 08:02 PM

State Farm here too. Never had a problem, never an attitude.

SARAFIL · 10-05-2011, 08:09 PM

ok, so here is some more info. sorry in advance if it becomes a data-dump.

First-- there is no company that will always be cheapest. Insurance is so tricky to price and every company has a different rating model. As a result, one company could be relatively cheap for you and relatively expensive for someone else. Just because someone else got the best price from company XYZ doesn't mean you would too. Bottom line, you need to shop around because your results will vary.

You have a few choices to make...
1) Direct or Agent-- you can buy insurance direct from many companies and you save money doing this (they pass along the savings from not paying agent commissions), but agents do add value in helping explain coverages, helping you get the right amount of coverage, etc. Some people also like having a local point of contact. Typically, younger folks looking to save $$ prefer direct (and like doing everything online or via phone) and folks that are a bit more established and have more assets to cover appreciate the piece of mind and guidance an agent can provide. You should decide what you prefer.

2) If agent... captive or independent? Captive agents sell only one brand-- Allstate, Nationwide, Farmers and State Farm are the big captives. If you go to one of these agents, that is all they have to sell you. That means you need to go to an agent for each company to shop rates. These agents also can't shop your rate around every few years to possibly save you money. Independent agents, on the other hand, represent a variety of carriers and can shop you around in a matter of minutes to find a good value. They use "comparative raters" that basically let them input all of your info and then send it off to multiple companies to get a quote. Some big names in the independent channel are: Travelers, Hanover, Hartford, MetLife, Safeco (Liberty Mutual subsidiary), Allied (Nationwide subsidiary), Encompass (Allstate subsidiary), Foremost (Farmers subsidiary), Chubb for high valued homes, AAA, and a wide range of smaller regional carriers. Progressive also sells through independent agents.

Beyond that... you definitely want to bundle your home and autos if you can. The potential savings are huge-- many carriers give 10%-20% discounts on your home and auto policies for bundling them together.

Also, be careful of different sales tactics. State Farm is one example... they advertise a ton of discounts, but they make up for it by starting out with the highest rates in the industry. You might get 40% off, but you start out with such a high rate that you end up still being about average to other carriers. But one thing they do reward is loyalty-- they have huge retention discounts if you stay with them long term.

Also pay close attention to the coverages, especially on your home policy. There can be significant differences in what type of coverage you get with different companies. Make sure you have at least 100% replacement cost for your house (you can also get more, 125% or even 150% with some companies) and make sure you are getting replacement cost (vs. actual cash value) for your household contents. Also, don't let them talk you into insuring the house for market value-- they should do a rebuilding cost calculation. Based on where you live, the replacement cost could be significantly higher or lower than the market value based on other factors such as the underlying value of the land. In metro-DC, I'd imagine that the actual replacement cost for your house is a good bit less than the market value since the piece of land itself is worth a good amount.

Lastly... make sure you are clear on the deductibles you are getting on the home policy. Many carriers are now doing special weather deductibles. You might have a $1000 deductible on the policy, but then a 1%, 2% or even 5% deductible for windstorms, hurricanes, earthquakes, etc. The percent deductible is that percentage of the amount of coverage on your house, not that percentage of the repair-- so a 1% wind deductible on a $500,000 covered property is $5,000.

Pinecone · 10-06-2011, 01:27 AM

Quote:

Originally Posted by BahnBaum

USAA rocks if you're lucky enough to qualify.

Alex

DEFINITELY.

JST · 10-06-2011, 06:08 AM

Thanks, sarafil. Great info.

wdc330i · 10-06-2011, 12:35 PM

Quote:

Originally Posted by JST

That'd be great, if you don't mind.

PM'ed.

ZBB · 10-06-2011, 01:27 PM

Quote:

Originally Posted by JST

Thanks, sarafil. Great info.

I'll add one other thing: Remember that insurance is regulated at the state level. That may drive prices with the same provider to be drastically different between states -- so if you used one provider and then move states, its definitely worth shopping around.

For example, when I moved from AZ to GA, the provider I used at the time for car insurance quoted a GA policy that was close to 2x what I had been paying in AZ for the same car and same coverage. I shopped around and ended up with another company that was slightly less than the AZ coverage. I had also quoted that company in AZ, and they were ~20% higher.

Alan · 10-07-2011, 06:36 PM

Sarafil ...

I have been in the Retail Insurance business for over 20 years and the wholesale end as well for the last 15 yrs and have to say your information was excellent

I thought you were in the Car business but now I am thinking you must be in the Insurance business ...

SARAFIL · 10-07-2011, 07:13 PM

Quote:

Originally Posted by AF

Sarafil ...

I have been in the Retail Insurance business for over 20 years and the wholesale end as well for the last 15 yrs and have to say your information was excellent

I thought you were in the Car business but now I am thinking you must be in the Insurance business ...

I was in the car biz for a long time but left in 2009 to go to grad school. I've been in insurance for a little while now.

I am a personal lines product manager for one of the carriers.

10-05-2011, 05:07 PM	#11
SARAFIL I like BMWs Join Date: Oct 2003 Carmudgeonly Ride: X5 M50 / M550 Location: Boston, MA Posts: 5,795	This is an area I now know a lot about. I'll post some more thoughts when I get home... But bottom line, shop around. And I recommend an independent (represents multiple brands) vs. captive (allstate, nationwide, farmers, state farm) agent bc they can shop you with many carriers while a captive only has one. Sent from my iPhone using Tapatalk __________________ 2020 X5 M50i -- Alpine White / Coffee Leather 2020 M550i -- Carbon Black / Beige Leather

10-05-2011, 05:12 PM	#12
SARAFIL I like BMWs Join Date: Oct 2003 Carmudgeonly Ride: X5 M50 / M550 Location: Boston, MA Posts: 5,795	Oh, and Chubb is $$$ but they are THE carrier of choice for high value homes-- they do a better job in this space than anyone else. "High Value" typically meaning a home with "coverage A" of $1,000,000+. Below that, you're probably paying a lot extra for bells and whistles you might not need. Sent from my iPhone using Tapatalk __________________ 2020 X5 M50i -- Alpine White / Coffee Leather 2020 M550i -- Carbon Black / Beige Leather

10-05-2011, 08:09 PM	#14
SARAFIL I like BMWs Join Date: Oct 2003 Carmudgeonly Ride: X5 M50 / M550 Location: Boston, MA Posts: 5,795	ok, so here is some more info. sorry in advance if it becomes a data-dump. First-- there is no company that will always be cheapest. Insurance is so tricky to price and every company has a different rating model. As a result, one company could be relatively cheap for you and relatively expensive for someone else. Just because someone else got the best price from company XYZ doesn't mean you would too. Bottom line, you need to shop around because your results will vary. You have a few choices to make... 1) Direct or Agent-- you can buy insurance direct from many companies and you save money doing this (they pass along the savings from not paying agent commissions), but agents do add value in helping explain coverages, helping you get the right amount of coverage, etc. Some people also like having a local point of contact. Typically, younger folks looking to save $$ prefer direct (and like doing everything online or via phone) and folks that are a bit more established and have more assets to cover appreciate the piece of mind and guidance an agent can provide. You should decide what you prefer. 2) If agent... captive or independent? Captive agents sell only one brand-- Allstate, Nationwide, Farmers and State Farm are the big captives. If you go to one of these agents, that is all they have to sell you. That means you need to go to an agent for each company to shop rates. These agents also can't shop your rate around every few years to possibly save you money. Independent agents, on the other hand, represent a variety of carriers and can shop you around in a matter of minutes to find a good value. They use "comparative raters" that basically let them input all of your info and then send it off to multiple companies to get a quote. Some big names in the independent channel are: Travelers, Hanover, Hartford, MetLife, Safeco (Liberty Mutual subsidiary), Allied (Nationwide subsidiary), Encompass (Allstate subsidiary), Foremost (Farmers subsidiary), Chubb for high valued homes, AAA, and a wide range of smaller regional carriers. Progressive also sells through independent agents. Beyond that... you definitely want to bundle your home and autos if you can. The potential savings are huge-- many carriers give 10%-20% discounts on your home and auto policies for bundling them together. Also, be careful of different sales tactics. State Farm is one example... they advertise a ton of discounts, but they make up for it by starting out with the highest rates in the industry. You might get 40% off, but you start out with such a high rate that you end up still being about average to other carriers. But one thing they do reward is loyalty-- they have huge retention discounts if you stay with them long term. Also pay close attention to the coverages, especially on your home policy. There can be significant differences in what type of coverage you get with different companies. Make sure you have at least 100% replacement cost for your house (you can also get more, 125% or even 150% with some companies) and make sure you are getting replacement cost (vs. actual cash value) for your household contents. Also, don't let them talk you into insuring the house for market value-- they should do a rebuilding cost calculation. Based on where you live, the replacement cost could be significantly higher or lower than the market value based on other factors such as the underlying value of the land. In metro-DC, I'd imagine that the actual replacement cost for your house is a good bit less than the market value since the piece of land itself is worth a good amount. Lastly... make sure you are clear on the deductibles you are getting on the home policy. Many carriers are now doing special weather deductibles. You might have a $1000 deductible on the policy, but then a 1%, 2% or even 5% deductible for windstorms, hurricanes, earthquakes, etc. The percent deductible is that percentage of the amount of coverage on your house, not that percentage of the repair-- so a 1% wind deductible on a $500,000 covered property is $5,000. __________________ 2020 X5 M50i -- Alpine White / Coffee Leather 2020 M550i -- Carbon Black / Beige Leather

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