Shopping for Insurance

Written by John Harrison Jr, Industry Expert in Insurance and Independent Insurance Agent

Shopping for insurance is not fun.  Talking about insurance is not fun.  And paying for insurance is definitely not fun.  But unfortunately, it’s part of the home-buying experience.  There are a few things you can do, however, to make the process of finding homeowners insurance a little less agonizing. For starters—don’t wait until the last minute.  You can start shopping as soon as the offer you’ve made on your new home is accepted. You’ll have a lot going on, with the appraisal and the inspection, and planning the move.  Frantically shopping for insurance, the day before you’re supposed to sign the contract, is not ideal.  Get started early and save yourself some grief.

Secondly—check around.  There are insurance agencies on nearly every corner in town. Call a few.  I would suggest checking with at least three—if you can stand to have the same conversation that many times.  State Farm, Farmers, American Family, Allstate….the list goes on, and these are all decent options.  Personally, I like the independent agent option, because they can do the shopping for you, and because I am one.

Next, be prepared to answer some questions.  Insurance agents need information; there’s no getting around it. We don’t ask questions to be annoying, we do it because it helps us get accurate rating information, and it can ultimately help us, help you, save money. Make sense? And honestly, that is exactly what we want to do.  We get it—no one likes paying insurance premiums! If we can help you find a lower premium option, with great coverage, it’s a win-win—you save money and we get your business!

Know what to expect.  If you haven’t already, you’re going to hear the term ‘replacement cost’.  This is a term that insurance companies use to explain how they’re going to settle a covered loss, and it’s a term they use to determine how much coverage you’ll need on your new home.  I don’t want to get into the weeds, but this is important:  If you’re buying a home that was built this year, the price you’re paying and the calculation for ‘replacement cost’ will be very similar figures.  But, if you’re buying a home that was built in 1978, the insurance company may calculate a number that’s higher than the purchase price—sometimes much higher—for replacement cost.  Here’s why—if that home that was built in 1978 is lost in a fire, the insurance company is going to pay to rebuild that home with brand new material—new lumber, new siding, new everything, at today’s costs.  You might get more bang for your buck when you buy an older home, but from an insurance standpoint, it’s all based on square footage and modern building materials/labor.

Lastly—try to see that there’s value in it.  Insurance is vital.  Chances are you’re borrowing a lot of money to buy your new home.  The bank could not provide your loan without some assurance that they’d still get their money back, even if the home they helped you buy is lost in a fire or tornado.  And hopefully you gain some peace-of-mind in knowing your new home, and everything in it, is protected if disaster strikes.

Written by John Harrison Jr, Independent Insurance Agent

Insurance Professionals, Inc.

6606 W Central, Bldg 101

Wichita, KS 67212

Office: 316.440.7880

Cell: 316.806.0556 johng@ipiwichita.com