So we’ve had a handful of customers come to us recently that have said something like this- “I got quotes elsewhere and they’re about $500 per year cheaper than what I currently have.” And when we ask if the coverage is similar or the same, they respond “I had them quote apples to apples.”
I hate to disappoint you folks, but there is NO such thing as apples to apples in insurance. Yes, there are some standard coverages and universal definitions, but no two companies use the same policy language or the exact same coverages. This means there ARE differences between insurance companies and policies.
And while these differences may really reduce your premium, the overall impact is usually NEGATIVE. So, yes you may be able to get it for far less, but you’re giving up a lot more. And what you’re giving up may not be worth it.
I realize that for many people the almighty dollar will still rule. But if you’re thinking of making a switch, please read this. Because whether you’re insured with us or with another company, the LAST thing I want is for you to make a decision that actually ends up hurting you.
Below are the top 5 reasons your Ohio auto insurance quote is less than your current policy.
1. The liability limits on the quote are LESS than your current policy.
Your current policy has $250,000 per person and $500,000 per accident for bodily injury and $100,000 for property damage. Your quote shows $25,000 per person/$50,000 per accident bodily injury and $25,000 property damage (which just so happens to be Ohio’s state minimum limit). That’s a HUGE change. And yes, the quote shows less coverage (A LOT LESS), so yes, it should be less premium. Keep in mind that a limit is a limit and when it’s gone, it’s gone. It wouldn’t take a very big accident to eat up that lesser limit. And when the insurance is maxed out, you get to pay the rest out of pocket. Think about that for a minute. It’s a big deal.
2. The quote shows liability only on some of the vehicles.
If your current policy shows liability + comprehensive and/or collision coverage, but the quote shows liability only, then YES, the premium will be less, because you’re getting less coverage. Liability coverage pays for bodily injury and property damage to another party. Comprehensive and collision pay for damage to your vehicle. So if you really do only want liability on your car, that’s fine. But know the difference and don’t get taken by surprise thinking you have comprehensive and/or collision when you don’t. You can read more about Full Coverage Auto Insurance vs. Liability Only in a separate blog post.
3. Your policy includes several additional coverage items. The quote does not.
Any insurance agent/company can slash premium by reducing the number of “extras” included in the policy. For example, do you currently have towing? Or rental reimbursement? Medical payments? Uninsured/Underinsured Motorists Bodily Injury Liability? Or any of the 800 optional coverage items that are available? I think you get the point. Know what you’re getting. And what you’re not.
4. The Motor Vehicle Report, CLUE Report and other reports have not been run.
So at our agency, when we do a quote, we gather ALL information and run all reports in advance so the numbers we give are as close to the finished product as possible. No one wants a big surprise. We’ve seen in some situations that agents eager to write business will present a quote WITHOUT having run those reports. So you see a great premium at the beginning. Then the reports are run at application time and the premium significantly changes- often for the worst. And often by that time, our customer has cancelled their policies with us. You can read more about our process in our blog post How To Get An Ohio Car Insurance Quote That’s Right the First Time.
5. The quote you have is from a company offering a “teaser”, “promo” or “intro” rate.
We’ve also seen where some companies will offer an artificially low premium to get your business. Now, they’ll never say this and will deny it until the cows come home, but we know it happens. How do we know? We’ve had enough customers come back to us after 6 months or a year and tell us their new company has significantly increased their premium. And we’re not talking about 5 or 10% (which is often normal). Nope, they’re seeing 25 to 50% on average. So just know that if the premium seems too good to be true, it probably is.
And here’s 5 reasons your Ohio home insurance quote is less than your current policy. And heads up- since your home is your largest asset, these differences could REALLY cause problems in the event of a claim.
1. The Dwelling coverage is significantly LESS than your current policy.
So this ONE thing can cause so many problems. First off, the standard homeowners insurance policy requires you to “insure to value.” This means that you must insure at 100% of the replacement cost or some other percentage (often 80%). When a claim happens to the dwelling, the insurance company calculates the replacement cost of the house and if you are not insuring at the specified percentage, then you will get a FRACTION of the claim settlement. This formula is written in the policy itself and can and WILL be used. And you will NOT be happy. So, yes, a lower dwelling coverage will reduce premium, but when the claim happens, you’ll be penalized. And yes, the penalty is often far greater than the premium difference for insuring at the correct replacement cost versus not.
2. The quote uses a different loss settlement than what you currently have.
This is a big deal too. In the world of insurance the two main ways to insure a house are replacement cost or actual cash value. Replacement cost means the cost to repair or replace today (think NEW). Actual Cash Value means Replacement Cost minus depreciation for age, wear & tear, etc. (think OLD). So at replacement cost you’re getting a BETTER loss settlement. We’ve seen some competitor quotes where the house is insured at Actual Cash Value (and it’s a newer house!). Well, sure, the premium is going to be less, but you’re getting waaaaaaay less than you think. And when the claim happens you’re NOT going to be happy. You can read more about Replacement Cost versus Actual Cash Value.
3. Your policy offers the MOST causes of loss available. The quote does not.
In insurance land, a claim is paid provided it’s a covered cause of loss. The best policy contract available basically says “it’s covered unless specifically excluded.” A lesser policy would actually list out the perils that are covered and if it’s not on that list, then it’s not covered. Perils are the things that trigger a claim (fire, wind, hail, etc.). It’s not that this is bad, BUT know that you’re getting a policy that is NOT the same as what you currently have. So again, lesser coverage equals less premium.
4. The deductible is different.
a. Maybe you have a $500 deductible on your current policy, and the quote shows $1,000 or $2,500. Anytime you raise a deductible you lower your premium. BUT that deductible comes out of YOUR pocket. Know what you’re getting.
b. Many companies have introduced by-peril deductibles. This means that the deductible varies by the peril on the policy. Perils are things that can happen to a home, such as wind, water, fire, hail, etc. Perhaps you have ONE deductible now. But the quote shows one deductible for wind/hail and one for everything else. Or maybe one for fire, one for wind/hail and one for everything else. Yes, this helps reduce premium, but you suddenly have more than one deductible to think about and when the claim happens, it may get very confusing. You can read more about this topic in our article Why does my homeowners insurance policy have two deductibles?
c. Lastly, percentage deductibles are becoming common. Where your current policy shows a $ deductible, the quote may show % of dwelling coverage as the deductible. Let’s do the math for a second. Current policy shows $1,000 deductible. Quote says the deductible is 2% of dwelling, which happens to be $200,000. 2% may not seem like a lot, but that deductible now changes to $4,000. Quite a difference wouldn’t you say?
5. Like your auto quote, many “extras” you have on your current policy are not included on the homeowners quote.
As mentioned, there is no Apples to Apples in insurance. But there are a few items that are pretty standard. For example, you may have water/sewer backup and jewelry scheduled on your policy. The quote doesn’t show any of this. Or maybe you have equipment breakdown and identity theft. Again the quote leaves these off. And leaving these off certainly lessens premium. But you’re also getting far less than what you had.
The lesson here? ANY insurance agent or company can sell you a cheap policy by raising deductibles, lessening coverage and a million other things. It’s easy to do. And if someone is anxious to make a sale, it’s REALLY easy to do. The solution? Find an agent you can trust, who will tell you the truth, thoroughly explain the quote presented and point out any key differences between your existing policy and the quote. That’s how we do business. Because not doing what’s best for you is NOT an option. To experience for yourself, call us or request your quote on our website.