THE WASHINGTON POST.
SATURDAy, MARCH 7, 2020EZ12
Consumer Advice
BY KEVIN BRASLERYou’re probably paying too much for
homeowners insurance coverage.
Each year, most Washington-area hom-
eowners let hundreds of dollars slip
through their fingers because they buy
coverage from high-price companies. The
nonprofit consumer group Washington
Consumers’ Checkbook collected price
quotes from major insurers for seven local
families and found that each could save
more than $1,000 per year by choosing a
low-price company over a high-price one.
That’s easy money.
For example, Checkbook’s sample D.C.
family (Zip code 20008, $844,000 replace-
ment cost, built in 1937) would pay only
$978 with Travelers; $2,752 to continue
with State Farm, their current insurer; or
more than $2,500 per year with Amica or
Lemonade. Checkbook has done these
types of comparisons for property insur-
ance for 30-plus years, always turning up
big price differences among the largest
insurers.
Often, highly rated companies offer low
premiums. For help in finding low-cost,
high-quality companies, Washington Post
readers can access Checkbook’s ratings of
homeowners insurance firms f ree through
April 1 via Checkbook.org/Washington-
Post/homeowners.Here are some tips on minimizing
premiums:
l Take a high deductible. You’ll get a
big discount, and it will make you less
likely to file small claims that may gener-
ate future premium increases. Keep in
mind that the purpose of insurance is to
protect you from losses that you can’t
afford to cover yourself. If you buy
insurance for small losses, you pay insur-
ance company overheads — sales, admin-
istrative and claims handling costs — to
deal with losses you could cover out of
your own pocket. You need to determine
how big a loss you can incur without
unacceptably disrupting your life and
then set your insurance deductible levels
accordingly.
l Obtain an accurate estimate of what
it will take to rebuild your home. Many
homeowners do not maintain adequate
insurance coverage, leaving themselves
financially vulnerable in the event of a
total loss. Don’t count on your insurer to
keep your homeowners policy up to date.
Every few years, have your insurer re-esti-
mate your home’s replacement cost, and
then adjust your coverage as needed.
l Maintain a good credit record if you
live in the District or Virginia. With
many companies, your credit score will
influence the rates you’re offered more
than anything else. (Maryland law prohib-its homeowners insurance writers from
using credit scores in setting rates, but
auto insurance companies can and do use
credit scores.) The prices most companies
offer customers with poor credit are
double what people with excellent credit
get. With some companies, the p oor-credit
penalty more than triples their rates, and
insurers increasingly use other secretive
and opaque methods to calculate rates.
l Consider buying your homeowners
and auto policies from the same compa-
ny. Many companies offer dual-policy
discounts to customers who insure their
homes and cars with them; however, such
discounts are usually small and won’t
make a high-cost company a good deal.
(Checkbook also evaluates auto insurance
companies for quality and price.)
Keep in mind that what companies sell
as their standard insurance policies var-
ies, which makes direct cost comparisons
more difficult. For example, some insurers
estimate the amount of dwelling coverage
needed and then automatically include an
extra 25 percent or more of protection to
make sure you’re covered in the event of a
total loss. Similarly, while coverage for
increased living expenses is usually set at
an amount equal to 30 percent of the
dwelling coverage, with some companies,
there is no limit. They instead reimburse
for actual living expenses for up to oneyear. And some companies automatically
cover personal property using a replace-
ment-cost provision rather than charging
an extra premium for it. If you are
interested in these types of enhance-
ments, make sure you’re comparing prices
for the same coverage.
No matter which company you choose
or w hich coverage you s elect, you’ll want a
company or agent who offers unbiased
information and quotes accurate prices.
Unfortunately, Checkbook’s undercover
shoppers often found many agents more
interested in selling them too much
insurance and unwanted options than
dispensing solid advice and reliable price
quotes. Their information was often in-
correct, even dishonest. When shopping
for insurance, speak with several compa-
nies and agents — and question price
quotes that seem excessive or include
unrequested coverage.Kevin Brasler is the executive editor of
Washington Consumers’ Checkbook and
Checkbook.org, a nonprofit organization with a
mission to help consumers get the best
service and lowest prices. It is supported by
consumers and takes no money from the
service providers it evaluates. See
Checkbook’s full report on homeowners
insurance free of charge until April 1 at
Checkbook.org/WashingtonPost/homeowners.A few ways to save money on your homeowners insurance
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