It’s next to impossible to watch any type of TV programming without seeing a commercial advertising how you can save money on your insurance. So should you really purchase your insurance policy based upon the cheapest price?
Before I elaborate on this, allow me to ask you a different set of questions:
- Would you hire an attorney based solely upon who has the cheapest hourly rates?
- Would you hire a financial planner or investment advisor based solely upon their fees?
If you’re like most people, you probably answered these questions with a resounding “no.” Then why should making a decision on your insurance policy be any different?
Your personal insurance policy protects your most important assets against physical loss and protects you against financial ruin stemming from liability losses. Working with an insurance agent shouldn’t be much different than working with an attorney, financial planner, or accountant – all of them should be trusted advisors to you and your family.
Obviously the insurance purchasing process involves a number of factors but coverage and service should carry just as much weight – if not more – than price. As I have written many times, not all insurance policies are written with the same policy language. I highly doubt that most of you have read your insurance policy, including endorsements, from cover to cover every year. Yet in those details is how your policy is going to respond to a claim. For example, you carry full coverage on your car. A rock cracks your windshield. You look at your policy and see that you have comprehensive insurance (which is the part of your policy that would cover this) with a $500 deductible. Great, that new windshield is coming out of your pocket, right? Well maybe or maybe not. Some companies have endorsements in their policies that waive the deductible for glass claims. Which policy do you have? Did you know that was an option? When you went shopping for your own insurance, did you know to ask about this?
Some auto insurance companies that advertise solely on price – especially those that advertise state minimum limits of insurance – will only cover drivers who are specifically named on the insurance policy. In such instances, if anyone else drives your car (even with your permission), you may not have insurance coverage in the event of an accident. Did you know some companies only cover specified drivers? When you went shopping for insurance, did you ask who was covered to drive your car?
Lastly, what type of service do you expect once you buy a home or auto policy? The old adage “you get what you pay for” certainly applies to insurance, as many of the insurance companies who advertise solely on price have some of the worst consumer complaint ratios. On the other hand, insurance companies that utilize local agents and local claims adjusters tend to have a higher degree of customer satisfaction. Do you place a value on a personal relationship with an agent or are you ok with whomever answers the phone at 1-800-insurance?
Since insurance isn’t a tangible object, it’s easy for people to focus on price. However, will a cheap insurance program provide you with peace of mind and confidence that you will be made whole after suffering a loss? Or will it leave you asking what you actually purchased once your claim isn’t fully paid or – even worse – denied?
Just as you rely on an attorney or financial planner to assist you with important life decisions, an insurance agent can assist you with finding the coverage that will best fit your needs…and your pocketbook.
