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.
