Becoming An Educated Consumer

Who enjoys shopping for insurance? No one. We all hate it. It means calling office after office giving the same information over and over, or going online for a falsified offer of an instant quote with a locked in rate.

Every person you speak with wants to build rapport with you to win you over from the other three agents or customer service representatives (CSR) you just hung up with and the next one you're going to call as soon as you hang up the phone. Here are three tips how to educate yourself when buying insurance without losing your hair, mind, or more importantly, time.

First, you need to understand shopping for insurance is a complicated process, not just for you but, from an agent's point of view, as well. Insurance companies require a lot of information in order to determine risk and rate such as age of the property, construction materials, interior features, loss history and most importantly your credit risk. Do not be afraid to disclose your Social Security Number (SSN). Most insurance companies require a Social Security Number before even proceeding with an estimate. If your identity is stolen by an agent or an agent's employee, you have plenty of recourse to make yourself whole again. Which ever agent wins your business is required to obtain your personal information anyway so disclosing it upfront can speed up the process. Honestly, insurance companies already have a ton of information on you at their finger tips. It's just easier and less costly for you to disclose your personal information, initially.

Second, know what your property's characteristics are. For example, if you are insuring your home; know the year it was built, the exterior building material, type of plumbing throughout the house, the year the roof was replaced, heating fuel, distance to the nearest fire station, approximate dates the electrical, plumbing, and HVAC systems were last updated. Replacement cost estimating software is only as good as the data input. If you want you property under-insured, then only disclose the basic information needed and hope it's enough in the event of a total loss. Tax assessor websites are getting better about offering property details but even the good ones are still limited in their information. If you have a wet bar, skylights, Jacuzzi bathtub, dual cooing units, elaborate staircase this is the time to disclose that information. No property owner wants to fight the insurance adjuster for extra money at the time of a loss when the wet bar was not disclosed on the application.

Third, be prepared to haggle. After disclosing all the characteristics of your property, discuss the produced numbers with the agent. If you feel the estimate is too high or low, review the data with the agent for accuracy. If you are working with an independent agent (highly recommended) and they are shopping your quote with multiple insurance companies, it is even more important to ensure they are including all eligible discounts. Make sure you are getting credit for all the available discounts offered by the insurance company, it's the easiest way to save money on insurance premiums.  If you are shopping for home insurance, be prepared to discuss quoting your auto insurance in order to take advantage of the biggest available discount. Most property insurance companies offer large discounts, up to 20%, if you include your autos with your home. Remember, agents and CSR's are human too and make mistakes, some honest and some not so honest.

In order to save the most amount of money year in and year out, you, the insurance consumer, need to make it a priority to shop for your insurance policies each and every year when the policy is up for renewal. Insurance companies are always raising rates, some higher than others. If you do not take the time to shop, you will pay more premium than necessary. Educated consumers keep more of their money. Are you an educated consumer?