We all see the commercials from insurance companies about how easy it can be to switch coverage from one to the next. With a simple phone call or a few clicks of the mouse, you could be saving hundreds of dollars with a new carrier. However, insurance expert Linda Rey has some words of warning for those who may be thinking of heading for greener pastures. In her recent post on the
Equifax Personal Finance Blog, ”
Switching Insurance Plans Can Cost You More In The End,” she explains why weighing all of your options beforehand may save you from a financial headache.
Rey points out that unless you are comparing identical policies, you may not be saving money at all. Even worse, your old deal may be gone if you end up switching carriers and then coming back to your original provider.
In her article, Rey shares the story of a client who moved his homeowner’s insurance without talking to her office first. Unfortunately, he was unknowingly purchasing less coverage (which explains why he was saving money.) His new policy had a higher deductible, a lower liability limit and less coverage on his home. Rey says that if he had given her a chance to quote the coverage differently or even to counter offer, she could have helped.
Unfortunately for the client, he figured all of this out too late. Once he decided to revert back to his old company, underwriting guidelines had changed, and he couldn’t get his previous rate for his previous coverage level.
So what can homeowners learn from this exchange? If you really want to save money on your homeowner’s insurance, talk with your current provider first. Visit the
Equifax Personal Finance Blog to read Rey’s full article and for more links to articles on homeowners insurance.
