Insurance advertising often attempts to lure new customers by claim that they can save money when changing their insurance.   Sometimes this is true, but often the premium savings come at the expense of valuable coverage.  This is especially true with Landlord policies.

A recent example occurred with one of our longtime clients.  They received a postcard in the mail promising savings, so the client responded and they were quoted a policy with lower premium than their renewal.  At first, they were very happy that they would be saving money.

They reached out to our office and sent us a copy of the other quote.  There were several differences.   First, The other carrier did not include any extended replacement cost coverage, while their current policy had 150% replacement cap.  This means that the dwelling limit on the policy is 50% more than what is shown on the declarations page.  This is a significant benefit because replacement of a structure can vary due to what type of loss occurs.  Many policies in wildfire area have been insufficient because materials costs and construction costs increase when many structures have to be repaired or rebuilt.

Second, while the carrier had liability coverage on the quoted policy, they did not know that the insured had a fairly large Umbrella.  Had the policyholder switched, the liability limit with the new quote would have been millions of dollars lower!  Yikes!!

Third, their current landlord policy had loss of rents coverage for 24 months, but the cheaper quote only had 12 months of coverage.  This is exactly half the coverage!

Lastly, the deductible quoted was $2,500 versus the $1,000 on their current policy.  This is a relatively small concern as the client had not had any claims.  But, it’s part of the big picture and truly lower quality policy that was being sold to them.

At the end of the day, the client close to pay $274 more for the significantly better coverage that they had all along.

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