Sunday, June 14, 2015

Picking an Insurance Agency

Pretty soon after signing the purchase agreement, we were contacted by a Ryan Homes partner company about insurance for our townhouse. I was pretty sure we were going to go with our regular insurance agency that we really like, but I thought I'd check it out just in case. This post is basically about how to compare insurance agencies... and why you should think twice about signing with the insurance agency that Ryan Homes recommends.

How to Compare Insurance Agencies
  • Check for reviews. I'm not talking about Yelp, I mean checking with your state insurance commissioner and the Better Business Bureau. If your state doesn't really have a lot of information (mine didn't), check other states around you.
  • Check for how they pay claims. Every insurance company has a "loss ratio," which is basically an indicator of how much they are paying in claims. The lower the number, the more likely the company is overcharging for premiums. The industry average is about 60% (source), so use that as your starting point.
  • Check for financial strength. In case anything happens to your home, you want to make sure the company has enough money in the bank to pay your claim. A.M. Best, Standard & Poor's and Moody's Investors Service all evaluate insurance companies.

A Warning About Ryan Homes' Recommendation

I should start off by saying that RH doesn't place any pressure whatsoever for you to go with a particular insurance company. You can pick whoever you want, no questions asked. But, I think it's a little dirty to partner up with a company that has horrible business practices, so I wanted to warn others here.

Not too long after signing, we got an insurance quote from Westwood Insurance, although the policy was actually going to be serviced by a company called Praetorian.

Praetorian has been under fire for all manner of poor business practices. Some sample quotations and sources:
  • In Texas, in 2013, Praetorian had nearly 15 (!!!) times higher than average compaints compared to every other insurer. In 2014 they had double the number of complaints. (Texas Department of Insurance)
  • Current and proposed ... rates are clearly excessive and in violation of statutory rate standards. The very low loss ratios alone indicate excessive rates. (Florida Office of Insurance Regulation)
  • [Praetorian] has offered to lower its rates by an average of 18.8 percent, despite the fact that state regulators said the rate decrease should be double that amount. (Insurance Journal)

If you have a military connection (you, your spouse, your parents), we can't recommend USAA highly enough. I'm not being paid or comped to say this or anything, we've just had a really excellent experience with them for fifteen years.


  1. Super interesting post. We were contacted by Westwood also but we aren't sure what to do. Did you find Westwood to be far less expensive then other companies?

  2. They were a TINY bit less expensive than what we were quoted by USAA, but honestly not by much at all -- I think it worked out to like within $15 per month, as I recall. But the fact that Westwood/Praetorian has so many complaints in so many states basically makes me think that even if it's cheap, I don't trust them to handle claims well. Of course, I'm no insurance expert or anything, but since we have an insurance company that has been really good to us for so many years, it was an easy choice for us to stick with USAA. We've had them for renter's insurance for like a decade or so, and they've always been really responsive with great customer service.

  3. Your lucky to have USAA, I heard the prices and service is good. At the moment we are using Liberty Mutual for our condo and they quoted us far higher then Westwood. We're definitely going to shop around now, thanks for pointing out their poor history.

  4. Oh wow, I wish I knew of other blogs like this when I was purchasing my townhome in 2009. So informative!!