Navigating the volatile insurance industry...as a consumer

If you haven’t realized, the insurance industry is EXTREMELY volatile. The industry is based off of the driving habits and living conditions of residents in any specific area. For example, if most people in one area tend to get into accidents, be it at fault or not, the insurance companies need to adjust their rates so that they are still making money. In order to make money they need to increase their premiums. Now because rates are based on a group of people, the people who have not been in an accident will be effected by the increase as well. You may have been driving for the past 20 years and never once received a citation or been involved in an accident yet you still continue to see increases in premium at renewal. This is because your neighbors may be in accidents or receiving citations and that affects you. The unfortunate reality doesn’t usually set in until you look at your renewal bill. You think to yourself that you have never been a bad driver and your premium should be decreasing. The same is true with home insurance, renter’s insurance and really every insurance.

The good news is that just because your premium increases doesn’t mean that you can’t do anything about it. There are many factors in an insurance policy that can greatly effects the premium besides good or bad driving. When rushing through a quote you may assume certain things but if you take the time to review or quote your policy correctly you may actually come out winning.

Here are a few examples that I have found that consumers missed and when corrected greatly help them with their premium payments.

1. Vehicle usage: When going through a quote many consumers will guess the miles driven per year. I have slowed my customers down and using a calculator actually figured out almost exactly how many miles they drive. For example, one customer told me they probably drive 10,000 miles per year but not 100% sure. I said let’s figure it out. 8 miles each way to work and works 5 days a week. If they worked every day of the year and never took a vacation, they would only drive 4,160 miles per year. I asked them how much more they drive beyond that. They told me just local to grocery store, etc. So now they saved $50 just by taking an extra minute to figure out their usage.
2. Marital Status: There is nothing to be ashamed about when it comes to your marital status. Life happens and some people stay married, some people divorce and some people pass. I have a rule, when I speak to a customer I am going to make them feel comfortable. When I ask the marital status question, I get the correct answer whether the person is single, married, divorced or widowed. In some cases, you will get a better rate if you put divorced or widowed as opposed to single. Single generally means “never married”
3. Prior insurance: If you are applying for home insurance whether for the first time or the tenth, your prior insurance can greatly affect your rate. Even if you are a first time home buyer and you currently have renter’s insurance that will help lower your premium

There are many more ways to save on insurance. Bottom line is don’t rush through quotes and if your agent is trying to rush you, don’t let them, it’s their job to help you.

Try these tricks for yourself or share them with your friends, family and clients.

Contact me for more info or a quote 443.823.4877 or [email protected]