{"id":162409,"date":"2013-03-19T04:00:57","date_gmt":"2013-03-19T11:00:57","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=162409"},"modified":"2019-10-02T19:16:50","modified_gmt":"2019-10-03T02:16:50","slug":"insurance-an-easier-way-to-comparison-shop","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/insurance-an-easier-way-to-comparison-shop\/","title":{"rendered":"Insurance: An easier way to comparison shop"},"content":{"rendered":"

I had procrastinated until I could procrastinate no longer.<\/p>\n

I was in the middle of buying a house, and one of the many, many things on my ever-growing to-do list was to find a home insurance policy. My
\nIt’s not easy to shop around
\nEvery money expert says to shop around for your insurance policies every year. Just call three or four insurance companies, get quotes, and pat yourself on the back for saving hundreds on your insurance policy<\/a>. Ta-da!<\/p>\n

But how many of us actually do it?<\/p>\n

I always intend<\/em> to do it. I know it’s good advice. But by the time a policy is up for renewal, it’s just easier to renew and pay than it is to spend an afternoon calling several companies, repeating the same information again and again, and waiting in misery as they assault your ears with static-y, easy listening on-hold music. Shiver.<\/p>\n

And then it’s still not over. You’ll probably have follow-up questions, so you have to call back. It’s also incredibly hard to compare some of these policies, since they’re written in (intentionally?) confusing language. And if you go with the cheapest, is the company really reputable? To find out, you’ll need to do a lot of additional research.<\/p>\n

Why is it so difficult to comparison shop?
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There are a few reasons it’s hard for consumers to shop around for insurance.<\/p>\n

First, we have a limited amount of time. Sure, it is worth it to spend time on something important like this. But how many companies will you call? I called four. Maybe extra-diligent folks would call seven or eight? That’s still not that many companies, if you think about all of the insurance companies out there. It’d be great to shop them all, but no one has the time or the desire to do that.<\/p>\n

Second, we’re not experts. Even if you know insurance pretty well, it can be hard to figure out if you’re sufficiently covered or if you’re over-insured.<\/p>\n

Third, it’s difficult to compare quotes. For instance, “manuscript” policy forms that don’t use industry-standard wording can be difficult to understand and make it even harder to compare one policy to another. “A lot of companies write their own policy forms to exclude coverage that typically leads to a lot of claims,” says Jon Schildt, managing principal at Calculated Risk Advisors. “Like the definition of water damage. Is it when wind pushes water from the ocean into your house or when rain builds up and floods your home? How that’s worded can affect how much you get reimbursed.”<\/p>\n

But just as I started to despair, the State Farm agent offered to introduce me to his wife.<\/p>\n

An easier way to shop for insurance
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It turns out that his wife, Nancy, was an independent insurance agent. Unlike “captive” insurance agents who only sell one brand of insurance, independent insurance agents shop from a long list of carriers.<\/p>\n

Nancy took my information, and a couple of days later she called me back with a few options. The policy she recommended would be $700.<\/p>\n

Shocked, I asked her to repeat that number. Then asked her to verify that it was for both home and auto insurance. Yes, $700. Yes, for both policies. No, it’s not some scammy fly-by-night company. And in fact, it was a very recognizable name.<\/p>\n

Nancy emailed me the details for all three options, I reviewed them, and I went with the one she recommended, feeling relieved to have it done. I was also feeling pretty great about myself for not paying almost two times more, even though Nancy did all the work!<\/p>\n

<\/span>Why cut in the middle-woman?<\/span><\/h2>\n

It’s not as though I’d never heard of independent insurance agents. I’ve used a couple in the past, but honestly, I was never impressed.<\/p>\n

For instance, one time I was working with an independent agent and I pointed out a way that we could save money on our renter’s insurance. “You know, I ran the numbers, and you’re right,” he said. “You do save more money that way!”<\/p>\n

Yikes. I’m not an insurance expert by any stretch of the imagination, so that made me nervous about what else he might be missing.<\/p>\n

And there are other natural concerns. For one thing, an agent is still a salesperson, and they work on commission. The more insurance you buy, the more it benefits them. That doesn’t necessarily mean that they’re out to scam you, it just means you have to really think about what you need and weigh that against their advice. “A good adviser won’t pressure-sale you, they’ll look at your budget and what your needs are,” says Michael Brunet, partner and director at Harry & Company in Ontario. Even so, keep that GRS tenet in mind: no one cares more about your money than you do!<\/strong>
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\n<\/strong>Despite the possible cons, a I learned that a good<\/em> agent provides a lot benefits, such as:
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