Posted by Shelly Eweka.
If you haven’t reviewed your insurance options in a while, you may be missing out.
Whether you need to insure your car, your home or your pet tiger, chances are you’ll use a comparison website or app to help you find the best deal.
These quick comparisons can make shopping for insurance much easier, empowering consumers to make more informed choices. As companies clamor to outdo each other and appear higher up in the rankings, prices can be driven down.
But before congratulating yourself for finding the “best” deal, it’s worth keeping the following in mind:
- Cheapest doesn’t always mean best value. Though I instinctively prioritize cost above everything else, I frequently need to remind myself that you get what you pay for. Some of the cheapest policies don’t cover everything you might expect homeowner’s insurance to cover. A great price will catch your eye before anything else, especially if it’s in bold print and sits prominently at the top of a results page. But the small print may reveal another story, such as a high deductible, for example.
- What does that attractively priced policy actually cover? Find out what you are really getting for your bargain-basement policy. When comparing airline flights, you know you’re getting from location A to location B; any price differences are essentially due to comfort and baggage allowances. With insurance, however, the variables are endless: Does the policy put you up in a hotel if your house burns down? What about hail damage—can you include that in your deductible? Some homes are in a flood zone, so certain “acts of God” may be covered, depending on your area. Sometimes it feels like you need to be an insurance industry expert just to cut through the small print and understand exactly what each policy covers.
- How level is the playing field? The comparison may only be capturing part of the market. Just go to another big name price-comparison website, purportedly covering the same market (say, home insurance) and you’ll often see products on one site that don’t appear on the other. Some big insurers choose not to appear at all. Meaning, you can’t always be sure that a comparison site, however familiar the name, is comprehensively comparing all products in the market. So although one app claims to be your one-stop shop, you may still need to put in some old-fashioned legwork to find the right deal for you.
- Read customer reviews. Most insurance companies promise to provide reliable coverage for your home, but how do you know that they will handle claims well and provide good customer service? Anecdotal evidence from existing customers can help guide your decision.
- Try and get an even better price than the “best.” Once you’re armed with a list of quotes, first contact your current provider and see what they can do for you. In my experience, everything is negotiable, and a key strategy in any negotiation is convincing the other side of your willingness to walk away. When I want to get a good deal from my cell phone provider, I usually tell them I’m looking to switch my contract to a lower-cost provider, and invariably, they offer some kind of match. The same principle applies to homeowner insurance. Like most consumer-aware businesses, providers are incentivized to retain customers. You may be able to negotiate a better deal simply by picking up the phone and speaking with an actual person. After all, online algorithms only see you as data.
Overall, price-comparison tools can be a good thing. Just remind yourself that these sites may not be as comprehensive or objective as they might first appear.