Insurance: Price Vs. Value, Are You Saving Smart?

Insurance premiums in Massachusetts are rising, which is causing people to decrease coverages or shop for a better price. While getting a good deal is always a good thing, buyers should beware that the old adage “you get what you pay for” holds true in insurance as well. Your insurance cost not only includes your coverages, but service as well. If you have an agent who is extremely helpful but your insurance premium is a little high, is it worth moving your insurance to another agent or direct insurance writer who simply gives you the phone number for a claim hotline after you have a loss? See below for some helpful insights and tips on getting the most value for your dollar.

Many people often look to decrease or remove coverages in order to bring pricing down. This may not be a wise choice, because if you start paring down coverages then you are more likely to end up footing the bill for certain incidents, or at the very least sharing the cost with the insurance carrier. A better option is always to look at your deductibles. Raising your deductible can shave a few dollars off of your premium without sacrificing coverages that you may end up needing after a loss.

If you use and independent agent for your insurance needs, be sure to let that agent shop your insurance before going to a new agent. The reason for this is because they know what coverages you have on your current policy and will be much more apt to quote your policy with the same coverages. There are many coverages that are included on insurance policies which do not show up on your declarations page. Many coverages are included in what is typically referred to as “bells & whistles” endorsements. These endorsements are packages that provide several coverages for one price. Many of these coverages are important and include expanding coverages for contents, giving you replacement cost on your dwelling and personal property, and a litany of other coverages. Most of the coverages provided in these endorsements are not listed out on the declarations page, so you may not realize what you are losing when being quoted with another carrier or agent.

If you do decide to give another agent a chance to quote your business, you should review those quotes carefully to be sure they are not removing coverages in order to reduce the premium. Be wary of quotes for a lower price with the same carrier your currently insure with. More often than not, you are not receiving the same coverages that your current policy is providing. Insurance companies do not have different rates for different insurance agents, so if there is a difference in price between two agents’ quotes with the same carrier, then they are not quoting the same thing.

The best way to get the most value in insurance is to bundle your home and auto policies together. The account credits provided are significant, and are added to both policies. If you currently have your home and auto insurance with the same carrier, do not shop your policies separately as you will end up transferring premium from one policy to another. For example, if you have both your home and auto with Commerce Insurance, and you decide to move your auto policy to Liberty Mutual to save $150, your home policy will lose the account credit and that policy could increase by as much as $200. Therefore, you actually are paying $50 more in total insurance costs than you were prior to moving your auto policy.