Homeownership brings many joys, but it also comes with responsibilities - one of which is ensuring that our homes are protected with the right insurance. Over the years, I, like many, have come to accept my insurance premium as just another bill to be paid. That was until a recent surprise on my premium notification left me questioning the value I was getting.
Out of the blue, I received a notice of an increase in my home insurance rate. Initially dismayed, I decided it was time to see if the grass was greener on the other side. With a cup of coffee in hand, I took to the web, intent on finding a better deal.
Now, here's where things got interesting.
Before I could even finalize a decision, my current insurance agent rang me up. To my astonishment, he offered to lower my home insurance rate. And not just by a little – my premium was now significantly cheaper. How did they know I was considering a switch? It was an uncanny coincidence, or so it seemed.
This experience left me with a valuable realization: It pays to shop around. Even if you don’t end up switching, the mere act of searching might prompt your current provider to offer you a better deal. Especially if you’ve been a loyal customer for years, no company would want to lose your business without a fight.
On my quest for more information about home insurance, I discovered something about the industry that many may not be aware of. Insurance companies use a database called LexisNexis C.L.U.E. (Comprehensive Loss Underwriting Exchange) to guide their pricing and underwriting decisions. It collects and reports up to seven years of auto and personal property claims and provides insurance risk scores.
Home insurance rates can be influenced by a variety of factors:The estimated replacement cost of your home
- Specific risks associated with your home or its location
- Personal characteristics and history as a homeowner
- Your claims record
- The level of coverage you select for your policy
Different insurance companies use varying underwriting methods and might provide different quotes for seemingly similar policies. Therefore, it's always a wise decision to compare quotes from multiple providers before making a choice.
To all homeowners out there: Your loyalty is valuable. Make sure your insurance provider knows that.
