Insurance might not be the most glamorous topic, but it’s a crucial aspect of owning a home and a car. Your choice of insurance can significantly impact your financial well-being and peace of mind. In this article, we’ll explore the insights shared by Ricky Hayter, a certified work comp advisor and licensed insurance broker, during a discussion on this week’s Monday Market Update. We’ll discuss the do’s and don’ts of selecting insurance for your house and car.
Understanding Your Insurance Score
Ricky introduces us to the concept of an “insurance score,” a term unfamiliar to many. Unlike a credit score, an insurance score isn’t a single number; rather, it’s determined by a variety of factors. This score influences the rates you’re offered when shopping for insurance. A higher insurance score doesn’t always guarantee the best rates, and the factors impacting your score might not be immediately visible to you.
Do: Work on Factors You Can Control
Improving your insurance score involves actions that impact your eligibility for better rates. Two key controllable factors are maintaining good credit and a clean driving record. These factors play a significant role in how insurers evaluate your risk profile.
Don’t: Switch Insurers Too Frequently
Rushing to switch insurance providers every year, just to chase the lowest price, can backfire. New customers often receive introductory rates, which can lead to higher costs in the long run. Staying with an insurer for at least two years can provide more stable pricing and avoid sudden rate hikes.
Do: Prepare for Big Life Changes
Before purchasing a home, it’s wise to ensure that your car insurance is in order. By addressing your car insurance first and maintaining stability, you can ease the process of adding homeowners’ insurance and enjoy more favorable pricing.
Don’t: Make Small Claims Unnecessarily
Small claims on your insurance can come back to haunt you. It’s recommended to avoid making claims for minor damages or accidents and instead reserve your insurance coverage for significant incidents. Frequent small claims can negatively affect your insurance record and raise your rates.
Choosing the Right Insurance Broker
Ricky emphasizes the value of working with a skilled insurance broker rather than relying on the “good neighbor” or “15 minutes could save you 15%” slogans. A broker provides personalized advice and helps you navigate the complexities of insurance.
Do: Seek Guidance from Insurance Brokers
Insurance brokers offer expert advice tailored to your unique situation. They ensure you understand your coverage, help you strategize for better rates, and advocate for your interests in the event of a claim.
Don’t: Settle for Captive Agents
Captive agents, who represent only one insurance company, may lack the ability to offer comprehensive advice. Brokers have a broader understanding of the insurance landscape and can compare multiple options to find the best fit for you.
Selecting insurance for your home and car is a critical decision that can greatly impact your financial stability. By considering the insights shared by Ricky and our team, you can make informed choices when it comes to insurance.
Remember the do’s: focus on factors you can control, prepare for major life changes, seek guidance from insurance brokers, and prioritize long-term stability over short-term discounts.
Meanwhile, avoid the don’ts: switching insurers too frequently, making unnecessary small claims, and settling for captive agents without comprehensive advice. Working with a skilled insurance broker, like Ricky, can be your best strategy for getting the right coverage and maximizing the value of your insurance investment. As you navigate the insurance landscape, remember that informed decisions today can lead to financial security and peace of mind in the future.