Saving pennies and spending dollars -- Why lowest price insurance is not always the best choice!
People typically purchase insurance because they have to, not because they want to.
I hear this often from clients. Most of them are obsessed with the bottom line price, and I cannot say I blame them as we are all on tight budgets! Most people are happy to obtain the minimum required insurance coverage at the lowest price they can find.
That is --- until a claim comes along. Only then do they discover that buying the cheapest insurance available wasn't such a bargain after all. They may have saved those pennies but now they are spending dollars to clear up a claim.
The quality versus cost argument is nothing new in the insurance industry. People who pay less tend to get less -- Ummm let me repeat that -- if you pay less you get less -- very seldom is it the other way around in this world.
So whether in the form of coverage's, limits or financial security when people choose cost over quality, they are often accepting risk they may not have fully considered. As your insurance agent it is my job to fully explain those risk and to insure you understand your personal insurance needs. Though many still choose cost over quality, it is important that they understand what they may be sacrificing.
Would you rather have automobile insurance that protects you from damage caused by someone who is uninsured or underinsured? Uninsured motorist is commonly excluded from a policy to reduce the premium. Rejecting GAP Coverage, accident forgiveness, accidental death, and/or reducing liability rates are other ways to save money. But these choices come with a risk. When shopping for insurance it's better to determine what coverage is desired, see how much that coverage would cost, and work with the insurance agent to help get the coverage you need at a cost you can live with!
Although cost is important, the financial strength of an insurance company may be more important. Financially weak insurance companies are more likely to become insolvent or go bankrupt, which means that their policyholders are less likely to get their claims paid. Though purchasing insurance from a financially weak company may be cheaper, how valuable is the money saved on premium if there is no money to pay a claim? Rule of thumb is simply this -- if you have never heard of them and no one has insurance with them -- you will need to do some additional homework to insure they are financially strong.
Insurance companies don't typically assign an agent to their customers. Each time you call you speak to a different person which means you have to explain your situation over and over. You ought to look for an agent that offers personalized service. Those are the agents who are willing to go the extra mile to get you what you need. This is invaluable when considering insurance. I have so many people who call me and say things like "I never could get a call back," or "it took 45 minutes to talk to a human being who could not answer my questions anyway."
A solid understanding of your insurance needs is the key to overcoming the quality versus cost argument. An experienced and reputable insurance agent can help you purchase insurance that is both economical and effective.
If you would like more information about any of our insurance products, please contact Herrholtz Insurance Agency at 440-527-0304!