SO you have a bunch of quotes and there seems to be a large difference in the premiums for each quote. Is this normal? What shouldn’t you always take the lowest quote? 
Insurance Companies are constantly advertising to bring in new customers. Often, they promise to bring lower rates and consumers flock to see if they can save money by changing to another carrier. Well sometimes the cheaper policy is missing coverage’s that the “higher cost” policy includes. Are these worth it? Let’s go over a few examples….
Insurance Company A
– Quote is $1,000 for a Homeowners policy with a Dwelling limit of $325,000 and a Replacement Cost cap of 200% Insurance Company B – Quote is $920 for a Homeowners policy with Dwelling limit of $325,000 and a Replacement Cost cap of 120% – which is better? They both have $325,000 of Dwelling coverage, but a 200% cap provides up to $650,000 at time of loss where a 120% cap provides $390,000. For $80 per year, you are getting $260,000 of additional coverage. This is a great value! Cheaper is not better in this case.
Insurance Company C – Quote is $765 for Car Insurance with state of California minimum liability limits ($15,000/$30,000/$5,000) but Insurance Company D charges $845 for Liability limits of $250,000/$500,000/$100,000.
Which is better? If you accidentally back into a Tesla in the parking lot and do $8,000 worth of damage, with insurance company C, you will have out of pocket of $3,000. For $80 per year with Insurance Company D, your claim is fully covered. Which would you choose?
There are many pitfalls with choosing the lowest price option when it comes to insurance. Our advice, call a trusted broker and get guidance on what coverage’s are most significant to you. Once you have done that, then let your broker shop for the lowest price – a lot less work for you with better coverage!
