You bought your home on your 10th wedding anniversary, 11/2. So, around this time of year, you can hardly check the mail without being flooded by offers from insurance agencies claiming to have the best deals imaginable. Each letter includes your address, details about your home, and maybe even a street view photo of your house.
Why am I getting these?
Insurance agencies are in the business of acquiring new customers, and they use a variety of methods to get their name out there. Direct mail is one of their tools, especially when they believe you fit a certain demographic and possibly have a policy coming due soon. These offers are part of their strategy to reach potential clients who might be in the market for new or better coverage.
Deciphering the Offers
- Understand the Pitch: Most offers will start with a headline like “Because you live in TX your rate could be as low as $xxxx” or “Exclusive Offer for New Homeowners.” They might include a sample quote or a comparison to show how much you could potentially save. While these pitches can be tempting, it’s crucial to look beyond the eye-catching numbers and flashy graphics.
- Check the Fine Print: It’s easy to get lured in by big savings, but always read the fine print. Offers often come with conditions or limitations. Look at the bottom of the offer you received.
- Beware of Lowball Quotes: The majority of these quotes will not be valid when you call in to finalize the deal frequently a tactic to get you to call or visit their website. Once you’re in the system, the company might offer you a higher rate or pressure you into additional coverage.
- Compare Apples to Apples: If you’re considering an offer, compare it directly with your current policy and with other quotes you’ve received. Ensure that the coverage levels and deductibles match up so you’re making an informed decision. If the coverage does not match, ask your current agent to modify your renewal quote.
Steps to Take When Considering an Offer
- Do your research: Check the reputation of the insurance company. Look for reviews, financial ratings, and customer service ratings. You want to ensure that the company you’re considering is reputable and reliable. Verify the agent has run your claims report with the carrier and has verified your policy is acceptable.
- What about inspections? Most if not all insurance companies are doing home inspections for new business. What happens when the carrier goes out and cancels your policy in 20 days because it does not meet their guidelines? You can be left without insurance or get stuck paying a much higher rate if that happens.
- Consider your needs: Think about what coverage you actually need. Sometimes the lowest quote without adequate coverage or high deductibles can end up costing you more in case of a claim.
- Verify information: Verify the information on the quote you receive and the application you sign are 100% accurate. If not, you could have a claim declined and/or your policy cancelled.
Be Skeptical of Too-Good-to-Be-True Offers
While saving money is always a good thing, be cautious of offers that seem too good to be true. If an offer promises extraordinarily low rates or huge savings without explaining the reasons behind them, it might be worth investigating further.