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Do These Losses Make My Premium Look Big?

Presenting a more attractive profile to the personal lines marketplace

Everyone wants to save money, and when those insurance bills show up in the mail we get really motivated to do some price-shopping. But just as with commercial lines insurance (covered in this blog post), constant shopping of your personal coverage can actually cost you more.

What you need to keep in mind is that just as you assess the pros and cons of different carriers, so do they assess you and the level of risk associated with your circumstances. The path to savings is in presenting a more attractive profile to those insurers. Here are some tips:

Plan Ahead: To get the best pricing, don’t wait until the week before your renewal. As noted, the assessment process happens in both directions, and it takes some time. And remember that an apples-to-apples renewal may not be the right thing … allow enough time for a full review of your coverage before applying, especially if your circumstances have changed recently (new home or vehicle, kids entering or finishing college, etc.).

Don’t Skimp: If you’ve decided to save money by carrying the state minimums in liability coverage, bad news: that’s a red flag for underwriters. People who have higher liability limits are statistically better customers; that is, they’re less likely to file claims. In one case we recently reviewed, this exact situation cost a client another $600 annually.

In for the Long Haul: Believe it or not, the length of time you’ve spent with your current insurer is a significant factor in pricing. It may seem logical to go out and shop for the lowest cost every year or two, but insurers invest significant amounts of time in underwriting and quoting an account. Someone who appears likely to jump ship again next year is a much less attractive prospect. This is why we don’t shop our personal lines customers around every year to save a few dollars.

We Know Where You Live: There are other factors in insurance pricing, of course, and some are out of your control, at least in the short term. Your education level makes a difference, as does owning a single family home vs. a condo vs. renting an apartment. And of course, your loss history matters a great deal, so drive safely.

Questions about personal lines coverage and presenting a more attractive profile to the marketplace? Contact Consolidated Insurance for the answers.

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