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4 Tips To Help You Negotiate With Home Insurance Agents For Lower Quotes
Expect an insurance agent to automatically give you the best rate on a home insurance policy. Insurance agents often receive a percentage of the yearly premium, giving them an incentive to sell you as expensive a policy as possible. However, if you do not renew your policy, they lose a commission, so they will be willing to strike a bargain to sustain a long term relationship with you.
Make sure you do your homework before you meet with your agent to discuss a policy. Check your state government website because every state has an insurance department responsible for monitoring the insurance companies. They have information available to help with your negotiation. For example, in Pennsylvania, the government website publishes an online brochure entitled “Your Guide to Homeowners Insurance” which contains a rate comparison, along with a glossary of insurance terminology. You also want to get accurate competitive home insurance quotes. Identical coverage can vary greatly among companies. Be armed with competitor pricing by asking for quotations using the SAME information each time. When calling other carriers for quotes, have a written list containing the description of your house, distance from the nearest fire department and hydrant, square footage, security devices and coverage and limits you want.
Moreover, check with your mortgage company regarding mandatory home insurance coverage. Most mortgage companies only require that you are covered for the balance of your mortgage. Many insurers try to add the land into the policy, claiming it is mandated by the mortgagor. However, in some states such as Texas and Pennsylvania, legislation has been passed banning this practice. Additionally, check the actual cash value versus the replacement cost coverage. Insurers may require you to be covered for the “replacement cost” of your home. This is not the same as “market value”, which is the actual sale price of a home. Replacement cost is the current cost for labor and materials to rebuild your exact home on your existing lot. Yet, there is no requirement that you rebuild the exact home in the event it is destroyed.
A large number of insurers use the same company, named Marshall and Swift, to calculate these “replacement cost”values. If your current agent refuses to write a policy for actual cash value, and your current market value is substantially less than the replacement value, you may want to look around for another company. But be sure your policy covers the balance on your mortgage at a minimum. It would be wise to consult with an insurance adjuster before purchasing a policy, to interpret exactly what types of incidents the insurance carriers are committing to cover.
How To Negotiate When Making A Homeowners Insurance Claim
When it comes to filing a home insurance claim — whether from fire, robbery, natural disaster, or more — it’s crucial to understand your rights and now the best practices for working with your provider. Here are some steps you can take to help ensure you receive the coverage you deserve.
Maintain an Inventory of Household Items
Before you file a claim, you should create and maintain a detailed inventory of the items in your home. Be sure to itemize the cost of each item. Have your valuables, such as antiques and works of art, appraised if necessary.
Additionally, it’s a good idea to take photos or video of the interior and exterior of your home. Upload your itemized inventory and photos to a site like Flickr or a cloud service so you can access them in the event your computer is damaged.
Know What Your Policy Does (and Does Not) Cover
Before buying a policy, take time to go over it thoroughly with an agent until you understand exactly what it does and does not cover. Many homeowners are unaware that they are underinsured. Most homeowner’s policies do not cover damage or a loss from flooding. You may need to purchase optional coverage for damage and loss from flooding, wind, or fire.
Document the Damage
In the event of a disaster, document the damage to your home and property immediately. If temporary repairs are necessary for your safety and to prevent further damage, take photos or video of the damage before you begin the repairs. Don’t throw away any damaged belongings until a claims adjuster has seen them. In the event of a robbery, contact the police immediately, and be sure you receive a copy of their report.
All of the above documentation will help you justify your insurance claim.
Get Ready to Negotiate
Don’t wait to contact your provider. As you make your calls, write down the name and contact information for each person you speak to. Once an insurance adjuster sees the damage to your home and assesses your losses, he or she will determine the amount of your payout. If the payout seems too low, ask the adjuster how they are justifying that lesser amount. Ask the adjuster to refer to specific language in your policy. If you are not satisfied with the payout and the reasoning behind it, contact another person at your provider’s regional or national office.
Consider Hiring a Public Insurance Adjuster
In the event of extensive damage to your home, where the cost of repairs and amount of reimbursement for losses will be well above your deductible, consider hiring a public insurance adjuster. A public insurance adjuster can sort out the language in your homeowner’s policy and possibly negotiate your claim more effectively. Public insurance adjusters typically charge 10 to 15% of the settlement amount. You can find a credited adjuster through the National Association of Public Insurance Adjusters.