Making informed comparisons using insurance cost is very limiting. At best, without all the details in my opinion only make cursory comparisons can be achieved. For example in TV “all homes are not the same” there is a range variables and characteristics that impact premium cost for most insurers:
1. Construction - modular/manufactured, frame/stick built, Hollow Cinder Block/HCB and Precast Concrete.
2. Age - 1970’s - 2025
3. Protection - Alarms, Security, Fire monitoring (pricing credits)
4. Packaging of products - (home, auto, etc) resulting in possible discounts
5. Loss history - frequency, vs. severity for a given insured
6. Building Value - Insurance Replacement Cost (is it current? Last updated?)
7. Perils insured - all risks/perils or are some excluded, such as Named Storm, Flood, Sink Hole
8. Deductible(s) all risk perils vs. catastrophic perils e.g., listed in #7 above
9. Insurance Company Rating - is the company rated by A.M. Bests? Standard & Poor’s? Demotech? All of these?
10. Financial Size of the company and ability to sustain loss - - (A.M. Bests has two elements in their rating a qualitative rating A-F, N/R as well as a quantitative financial size rating (I - XV) reflecting policy holders surplus.
11. Insurance financial analysis reflect multiple approaches to include GAAP as well as Statutory Reporting (driven by actuarial analysis) resulting in industry specific financial metrics that are comparable to financial ratios for performance, solvency, and other measures Insurance Regulatory Information System (IRIS Tests) developed and managed by the National Association of Insurance Commissioners (NAIC).
Bottom line, for most of us, insurance is an undifferentiated product where cost and coverage is the primary determinant and the product is the same. Many insureds depend on their independent insurance agent/broker for informed guidance as to product, price, coverage, claims ability while others obtain coverage directly from the insurance company and do their own research as to suitability of coverage and other factors.
I obtained multiple quotes for my home in TV using both local independent insurance agents and from my direct insurer. At the end of the day the pricing difference between the local market and my current insurer was less than 10% between companies using all the factors listed above. We market our insurance program every 4-5 years just to be sure we receive value for our premiums. Our existing insurer provided comprehensive coverage for our home in FL due to our longterm relationship of over 40-years. During the underwriting process we learned that had we not been a longterm client the new second home would not have been eligible for coverage.
|