Homeowner's Insurance - Price vs. Quality

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9liner
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Homeowner's Insurance - Price vs. Quality

Post by 9liner » Thu Sep 13, 2018 4:17 pm

Apologies if I missed the answer during a forum search. I am currently in the process of shopping for insurance for a new house. Throughout my search, I have come across widely varying rates from different companies anywhere from 80/month to 180 month. My concern is not necessarily the price, but choosing the most appropriate insurance company to meet my needs in the event of a catastrophic occurrence.

For instance, USAA has provided me with a middle of the road price ($110/month). They are very highly rated by consumer reports and other reviewing entities. Liberty Mutual is the lowest quote with the best coverage ($83/month), however they are rated middle of the road by consumer reports and I've read some horror stories on other sites about them.

When does the quality of a company preclude price?

daveydoo
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Re: Homeowner's Insurance - Price vs. Quality

Post by daveydoo » Thu Sep 13, 2018 4:30 pm

As with all insurance, it's not how much it costs but how much you will be able to collect if the need arises.

Insurers are rates by their financial strength, which includes a combination of good-for-the-consumer and bad-for-the-consumer factors. For example, you could have a great balance sheet by denying more claims than the industry average.

I would go with USAA or Amica. They will not be the cheapest or the most expensive, but they are generally considered to be the "best."

I have worked with both and have been impressed by the caliber of the employees and the service mentality at every level.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

sport
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Re: Homeowner's Insurance - Price vs. Quality

Post by sport » Thu Sep 13, 2018 4:41 pm

I have two suggestions:
1. Have all your casualty insurance with one company. This would include auto, personal articles, etc. The insurance companies give discounts for having multiple policies.
2. Pay the premium annually rather than monthly. There is often an extra charge for monthly payments.

mhalley
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Re: Homeowner's Insurance - Price vs. Quality

Post by mhalley » Thu Sep 13, 2018 4:54 pm

Insurance is one of the few things Clear Howard recommends paying a premium se opposed to chrapong out. No personal experience, but he does recommend Amica and usaa frequently.

drawpoker
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Re: Homeowner's Insurance - Price vs. Quality

Post by drawpoker » Thu Sep 13, 2018 5:04 pm

You need to do alot more digging here.
1st, what is your credit score? There are only a handful of states where insurers are prohibited from using credit scores in selling H.O. insurance. You need to find out where you stand there. Then, among the various companies, some put more weight on a high credit score than others. (You would likely have to consult a broker to find out this type of information)

2nd Some companies ask about smokers, some do not. You definitely want to make sure you find one where non-tobacco users will play into the premium amount.

3rd You definitely want to check reviews online. Not from customers, but an indep source like Consumers Reports. They completed their 2018 review of the best companies for H.O. insurance in June. This will tell you actual data of which companies are known for prompt claims service and which are known laggards.

9liner
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Re: Homeowner's Insurance - Price vs. Quality

Post by 9liner » Thu Sep 13, 2018 5:09 pm

Credit scores for DW and I should not be an issue - both 830+.

Neither of us are smokers and it has never come up in a H.O. Quote.

I have reviews online and CR and, as I stated in my OP, the reviews vary. What I was looking for was how much credence BH’s put on reviews vs. price.

Does one outweigh the other when considering insurance companies. Amica was astronomical at 176/mo. USAA and Geico were middle of the road around 100/mo. Liberty Mutual was the lowest at 80/mo.

When it comes to H.O. policies, do you “get what you pay for?”

drawpoker
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Re: Homeowner's Insurance - Price vs. Quality

Post by drawpoker » Thu Sep 13, 2018 5:12 pm

You figure it out.

Two of the biggest names out there, SnakeFarm and Allstate, made the Worst list. Yet Snake continues to rake in customers because they boast they are the biggest. :wink:

Hartford made the Best list, yet they are known for their sneaky lowball pricing of sr. citizens thru their AARP tie-in, lure them in, and then pounce at renewal with astronomical increase.

Liberty Mutual, also on Best list, gouges people who rent on their car insurance policies, despite having stellar driving records (you will see that in the other thread here on H.O. insurance)

daveydoo
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Re: Homeowner's Insurance - Price vs. Quality

Post by daveydoo » Thu Sep 13, 2018 5:23 pm

9liner wrote:
Thu Sep 13, 2018 5:09 pm

When it comes to H.O. policies, do you “get what you pay for?”
Only when your house burns down.

I answered earlier in the thread, but this is unanswerable now -- exactly how much additional would BH pay for carrier x over carrier y? What's the perfect asset allocation? Would I pay double? Only if there were a snake low-ball that would cover me for $500. If all your other estimates came in at $1000, I don't think I would pay $2000 for USAA or Amica. But I would pay 30% more.

As others have said, make sure you're comparing apples to apples. Is one of those offers from a company that holds your other policies? Are you interested in umbrella if you do everything with one carrier, etc.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

talzara
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Re: Homeowner's Insurance - Price vs. Quality

Post by talzara » Thu Sep 13, 2018 5:32 pm

9liner wrote:
Thu Sep 13, 2018 5:09 pm
Does one outweigh the other when considering insurance companies. Amica was astronomical at 176/mo. USAA and Geico were middle of the road around 100/mo. Liberty Mutual was the lowest at 80/mo.

When it comes to H.O. policies, do you “get what you pay for?”
No, you should not use price to judge quality. Each insurance company has a different premium structure, and prices will vary widely.

Year after year, USAA is either tied with Amica for #1 or just behind at #2.

GEICO does not write its own homeowners insurance policies. It only sells policies written by other companies. It is this company that will be paying any claims, not GEICO.

blues008
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Re: Homeowner's Insurance - Price vs. Quality

Post by blues008 » Thu Sep 13, 2018 5:34 pm

Not sure how good the JD Power Ratings are comparing the top companies, but it's listed here:

https://www.jdpower.com/business/press- ... tion-study

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Phineas J. Whoopee
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Re: Homeowner's Insurance - Price vs. Quality

Post by Phineas J. Whoopee » Thu Sep 13, 2018 6:30 pm

Beyond financial strength of the issuer, there also is a question of what each policy covers. Homeowners insurance policies are not a commodity product. Some may be more valuable to you than others, which could justify paying a higher price.
PJW

onedayer
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Re: Homeowner's Insurance - Price vs. Quality

Post by onedayer » Thu Sep 13, 2018 7:39 pm

As “talzara” mentioned, every company has their own premium structure/rating guidelines. Just because Carrier A costs $1,000/year and Carrier B costs $2,000/year, does not mean that Carrier B is a superior company or that their policy is superior to Carrier A’s policy just because it costs more. There are MANY different factors that play into it which could cause one carrier to have significantly higher rates than another carrier, but again, the premium is not dependent on the quality of a carrier/policy.

Also, when shopping around and comparing internet ratings of insurance companies, keep in mind that people are much more likely to get online and rant about a bad experience than they are to praise a company for a good experience. Take everything you read online with a grain of salt as there are always two sides to every story. I would recommend paying more attention to the financial rating of companies as opposed to customer reviews.

I am also going to have to disagree with “sport” above. Although most companies nowadays do offer some sort of multi-policy discount, this is often times just a marketing tactic in order to get all of your business. If you get in contact with an independent agent, you may be pleasantly surprised to find that you’re better off putting your policies with multiple carriers rather than the same one. You probably wouldn’t be receiving any multi-policy discounts, but who cares if the overall cost is lower?

drawpoker
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Re: Homeowner's Insurance - Price vs. Quality

Post by drawpoker » Thu Sep 13, 2018 8:40 pm

Another point to be made here - Don't overlook the many smaller, regional P&C companies out there for H.O.

Sometimes it is the smaller companies that like to focus more on the preferred risks, the best of the best, cream of the crop. Since they believe these preferred risk people (generally older so may not help OP) are the least likely to file claims and cost the company money, they can offer some very good premium prices. Compared to the bigger companies, same coverage for H.O. could be as much as $150-$200 less.

(As far as how insurers decide who is a preferred risk and who isn't, they look at Everything. Not just credit score but even your driving record is factored, even tho you aren't applying for auto but H.O. The status of your health. If you have a divorce(s) How long you have been at your job. They take that C.L.U.E. database of their's and scrutinize everything in it. With a magnifying glass. :|)

Think CinFin, Farm Bureau, CHUBB, Donegal, ,Brethren Mutual, Westfield, West Bend Mutual. There are over 200 companies in the U.S. selling H.O. policies so it is going to be very difficult to hunt down these without using an indep. broker. You might have to go to several brokers, not just one, as the contractual arrangements between the brokers and the companies vary so much.
Ex: Broker X may represent 7 or 8 companies, but not one of the ones that interests you most. That one is represented by Broker Y, across town. You've got to be persistent, and willing to spend time on old-fashioned leg work.

Of course, nothing with insurance is foolproof. One of these companies that concentrated on preferred risks and offered some fantastic prices (Peninsula based here in MD) folded their tent and closed up two months ago. :shock: :shock:

Apparently they were too picky, not enough business to be profitable. :oops:
Last edited by drawpoker on Thu Sep 13, 2018 11:30 pm, edited 1 time in total.

RickBoglehead
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Re: Homeowner's Insurance - Price vs. Quality

Post by RickBoglehead » Fri Sep 14, 2018 4:57 pm

Make sure you compare AMICA after dividend and with e-bill.

Also make sure all coverage and discounts match.

Grt2bOutdoors
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Re: Homeowner's Insurance - Price vs. Quality

Post by Grt2bOutdoors » Fri Sep 14, 2018 5:11 pm

I found Amica to be consistently more costly for same coverage as State Farm. I’ve found Liberty Mutual does not offer like for like coverage, for them to beat State Farm on price they attempted multiple times to lower my coverage amounts - what is the sense of switching if you are going to be under-insured? And, they wanted to provide my car insurance coverage but their cost was $500 over current price. I did not like my experience with Liberty Mutual at all, it was sneaky pricing IMO. Geico used a reinsurer to provide coverage, their cost was higher than Amica, no thank you.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Homeowner's Insurance - Price vs. Quality

Post by Grt2bOutdoors » Fri Sep 14, 2018 5:13 pm

RickBoglehead wrote:
Fri Sep 14, 2018 4:57 pm
Make sure you compare AMICA after dividend and with e-bill.

Also make sure all coverage and discounts match.
You can only compare if Amica actually discloses what dividend will be, how would they know that in advance? The board of directors would have to declare it and it would have to be approved by insurance regulators.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

RickBoglehead
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Re: Homeowner's Insurance - Price vs. Quality

Post by RickBoglehead » Fri Sep 14, 2018 6:11 pm

Grt2bOutdoors wrote:
Fri Sep 14, 2018 5:13 pm
RickBoglehead wrote:
Fri Sep 14, 2018 4:57 pm
Make sure you compare AMICA after dividend and with e-bill.

Also make sure all coverage and discounts match.
You can only compare if Amica actually discloses what dividend will be, how would they know that in advance? The board of directors would have to declare it and it would have to be approved by insurance regulators.
AMICA is a mutual company. Policies receive a dividend in most states, basically 20%. Used to be higher for some policies.

tj
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Re: Homeowner's Insurance - Price vs. Quality

Post by tj » Sat Sep 15, 2018 11:19 am

RickBoglehead wrote:
Fri Sep 14, 2018 6:11 pm
Grt2bOutdoors wrote:
Fri Sep 14, 2018 5:13 pm
RickBoglehead wrote:
Fri Sep 14, 2018 4:57 pm
Make sure you compare AMICA after dividend and with e-bill.

Also make sure all coverage and discounts match.
You can only compare if Amica actually discloses what dividend will be, how would they know that in advance? The board of directors would have to declare it and it would have to be approved by insurance regulators.
AMICA is a mutual company. Policies receive a dividend in most states, basically 20%. Used to be higher for some policies.
On their website, its says "Amica offers two types of policies: dividend and traditional (non-dividend)."

How do you know if your quote is a dividend policy or not? Whenever I've used the online quote tool, it only has one price.

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dm200
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Re: Homeowner's Insurance - Price vs. Quality

Post by dm200 » Sat Sep 15, 2018 11:39 am

9liner wrote:
Thu Sep 13, 2018 4:17 pm
Apologies if I missed the answer during a forum search. I am currently in the process of shopping for insurance for a new house. Throughout my search, I have come across widely varying rates from different companies anywhere from 80/month to 180 month. My concern is not necessarily the price, but choosing the most appropriate insurance company to meet my needs in the event of a catastrophic occurrence.
For instance, USAA has provided me with a middle of the road price ($110/month). They are very highly rated by consumer reports and other reviewing entities. Liberty Mutual is the lowest quote with the best coverage ($83/month), however they are rated middle of the road by consumer reports and I've read some horror stories on other sites about them.
When does the quality of a company preclude price?
That seems quite a large range for the same coverage?

We have never had a claim on our HO (State Farm) in 40 years and we get discounts for no claims and that we have our auto with them as well. Several claims over the years on auto. Very happy with State Farm over the decades. On HO, we have a deductible of 1% of insured value - which saves on the premiums and is an acceptable risk.

I don't know how to do this, but I would not just look at the initial price BUT what will or may happen to the price in succeeding years.

RickBoglehead
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Re: Homeowner's Insurance - Price vs. Quality

Post by RickBoglehead » Sat Sep 15, 2018 4:59 pm

tj wrote:
Sat Sep 15, 2018 11:19 am
RickBoglehead wrote:
Fri Sep 14, 2018 6:11 pm
Grt2bOutdoors wrote:
Fri Sep 14, 2018 5:13 pm
RickBoglehead wrote:
Fri Sep 14, 2018 4:57 pm
Make sure you compare AMICA after dividend and with e-bill.

Also make sure all coverage and discounts match.
You can only compare if Amica actually discloses what dividend will be, how would they know that in advance? The board of directors would have to declare it and it would have to be approved by insurance regulators.
AMICA is a mutual company. Policies receive a dividend in most states, basically 20%. Used to be higher for some policies.
On their website, its says "Amica offers two types of policies: dividend and traditional (non-dividend)."

How do you know if your quote is a dividend policy or not? Whenever I've used the online quote tool, it only has one price.
Never used site for a quote. But it offers Chat, Email, and Phone options. Ask them.

Does it not say on the quote?

boglerdude
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Re: Homeowner's Insurance - Price vs. Quality

Post by boglerdude » Sat Sep 15, 2018 10:55 pm

"Amica auto dividend policies are not available in CA, FL, HI, MA, MO, NC, NJ and TX.
Amica home dividend policies are not available in CA, FL, MO and NC."

Recent thread with good posts on insurance: viewtopic.php?t=251023

tj
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Re: Homeowner's Insurance - Price vs. Quality

Post by tj » Sat Sep 15, 2018 11:21 pm

boglerdude wrote:
Sat Sep 15, 2018 10:55 pm
"Amica auto dividend policies are not available in CA, FL, HI, MA, MO, NC, NJ and TX.
Amica home dividend policies are not available in CA, FL, MO and NC."

Recent thread with good posts on insurance: viewtopic.php?t=251023
I'm in AZ, so presumably dividends are available. They have a pretty bad website quoter if they don't give you both options, which they don't seem to do.

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