Did Your Insurance Agent Help You Find the Best Coverage, or Simply the Best Price?

Did Your Insurance Agent Help You Find the Best Coverage, or Simply the Best Price?

November is all about homeowners insurance agents. Have you got the best coverage available?

This is the first in our insurance agent series. This week we’re looking at your policy – did your agent help you make the most informed decision possible? Or did they simply give you a list of carriers with premiums, ranked by lowest cost, and expect you to choose among the cheapest options?

When your insurance agent presents you with quotes from different carriers,  time should be spent on explaining the difference in coverage between carrier policies. Having a strong agency to help you with your insurance needs means that your agent does not simply give you the three policies with the lowest rate.

When it comes to rate vs. coverage, not all standard homeowners policies (HO3) are the same. If you simply buy the cheapest policy without understanding key coverage differentiators, you may be getting the same raw dollar amount of basic coverage, but you’re almost certainly losing coverages in the fine print (AKA changes within the policy’s “Special Provisions”).

Areas of coverage that can vary greatly between HO3 policies include:

Deductibles

It is important that your insurance agent explain the different deductible options available through each carrier. Usually, there are two deductibles – a hurricane deductible, and an All Other Perils (AOP) deductible. Deductibles can be percentage-based or flat.

• Percentage-based deductibles are calculated on the insured value of your home (or “Coverage A”). A 2% deductible on a $300,000 home would be $6,000 out-of-pocket.
• Flat deductibles are set at a whole dollar amount, like $500 or $1,000. Expect to pay a higher premium in exchange for a low flat deductible. 

Water Damage

Many standard homeowners policies (HO3) contain limitations for water damage, such as automatic exclusions, mandatory time periods, or pre-set caps on coverage. Water damage claims can be among the most expensive for the homeowner, so having an agent who can educate you on the water damage coverage differences from policy to policy is of utmost importance.

Tip: Olympus offers one of the broadest water damage coverages available.

Pool Enclosures

Many standard homeowners policies (HO3) apply low coverage sub-limits regardless of the peril, or will apply exclusions to some or all of the enclosure when damaged by wind or hail.

Tip: Olympus covers most attached pool enclosures, including frames and screens, at replacement cost.

Wind-Driven Rain

Most standard homeowners policies (HO3) now exclude coverage for damage to house contents due to wind-driven rain, and in many cases fine print extends this exclusion to the house itself.

Tip: Olympus customarily covers “wind-driven rain damage” even if there are no holes in your roof or windows.

If your insurance agent isn’t highlighting differences between policies aside from cost, ask them to explain the different coverages available. In some cases, the cheaper policy can have significantly less coverage, and could end up costing you more in the event of a loss.

Next week, we’ll look at your policy renewal.

This article is for informational purposes only and does not form a part of, replace, change or amend any terms, conditions, provisions or language within your Olympus Insurance policy. We encourage you to read your entire policy.