How rate home insurance companies?
August 11, 2021 11:24 PM   Subscribe

How do you go about picking a home insurance company? Do you go strictly on price? Is there a way to figure out who good/evil the company is at when you file a claim? More inside

It's renewal time and it's been 5 years since I last thought about switching. I've been lucky in that I haven't had to file a claim, so I'm not sure how good/bad my current home insurance provider is.

I did some quotes from competitors, some were above, some were below. The Costco affiliated vendor (Connect by AmFam) was wayyyyyy cheaper. Is this a case of what you pay is what you get?

I did some googling, and a lot of the insurance review sites seem sponcon / sketch.

What's your process for shopping for Home Insurance?
posted by FlatHill to Home & Garden (16 answers total) 8 users marked this as a favorite
My personal route - I'm in the UK FWIW - I guess these considerations vary by country:

1. Fill in the parameters for the home insurance request on a comparison site. (example: moneysupermarket) - this should allow you to specify any special snow-flake details about your house. For example mine is a "listed building" meaning that it would be quite expensive to re-create if hit by a meteorite.
2. You should get a list of potential providers. The comparison site also provides links to ratings from their customers for each. Normally I will choose the cheapest policy from a firm which will supply a quote for me and which is not badly reviewed for their claims handling. It is notable at this stage, that there are many companies offering the same service at wildly more expensive premiums.
3. Link through to the suggested site from the comparison site - and also directly. Look at the details offered and verify that the snow-flake details are accepted in terms of the policy. Check the price and purchase if OK.
4. After a year, the insurance company will give a notification of renewal. At this point it is almost always worth re-running steps 1-3 to see if their deal is OK. Loyalty is usually rewarded negatively.
posted by rongorongo at 2:53 AM on August 12, 2021

Defaqto rate financial services providers against a range of metrics - free to use online. Once I’ve found a couple of policies that meet my other criteria, I always do a Defaqto cross check
posted by JJZByBffqU at 3:16 AM on August 12, 2021

Best answer: There are some insurers that market directly to customers, without the use of local agents. There are some insurers that use only their own captive agents, while others use independent agents who are authorized to place business with several companies.

Some companies have only a small number of claims offices across the country. Others have claims offices in each state.

You would probably want to have a local agent, one who can assist in the event of a claim. You would probably want to deal with a company that has claims people in your state, rather than thousands of miles away.
posted by yclipse at 3:49 AM on August 12, 2021 [1 favorite]

Best answer: One other thing my mother learned a few years ago... you may not want to go with the same company that the vast majority of your neighbors use. A massive hailstorm hit my home town several years ago, damaging every home to some degree or another. A significant portion of the folks in her neighborhood used State Farm, and it took much longer for those homes to be reviewed by the adjuster and get paid because that company was simply overwhelmed.
posted by kimdog at 5:31 AM on August 12, 2021 [3 favorites]

Best answer: I am very happy with my choice going with a local independent agent. He prepared quotes from several companies, and one of them was a chunk lower than anything else I was seeing, but not so low as to be suspicious. He also told me about his personal experience with the company, compared to others, over the past decades.

An agent has a built-in alignment of interest with you. They don't want you to get screwed because it will hurt their business, and they want to get you a good price, bc they'll otherwise lose your business. Sure they have their own interest too and are not exactly helping you out of humanitarian goodness, but an insurance agent is not like a car salesman, they need to build successful
ongoing relationships to stay in business.

It's already been a big boon to have a guy who I can easily call directly to work out a few small paperwork issues we had. If I do have to claim, I like knowing I'll be calling Tim first, and that he works for me, not t he insurer.

In the US at least, you'll almost always come out ahead if you roll in your car insurance with the same company, assuming you need that too.
posted by SaltySalticid at 5:53 AM on August 12, 2021 [1 favorite]

Best answer: A couple things to consider:

1. You might benefit from not switching. My wife has a very long relationship with our insurer, which happens to be State Farm, and that has resulted in very low rates for us.

2. Allstate is expensive but has given my in-laws outstanding service. During a wildfire evacuation some years ago, a bunch of insurance companies were set up in the same site to help people. Many people were standing in line, crying and filling out forms. My in-laws were taken care of very quickly. The agent counted out about $5,000 in cash and asked them if that would be enough to handle the evacuation.
posted by NotLost at 6:50 AM on August 12, 2021

Best answer: I use an independent agent and I make him reprice it every year. Homeowners insurance is one of the very few financial services products where there can be a reason not to go with the low bid. I expect my agent to have a view on the service of the providers they are pricing for me.

If you are going to pay more you should be paying more for a carrier with a reputation for high quality claims servicing. Solvency isn't generally a concern.

Would also agree you should consider bundling in your Auto + Umbrella with your homeowners. Usually the Auto is at best competitive and the Umbrella is very very cheap (but usually only available if you do homeowners + autos bundled)
posted by JPD at 6:54 AM on August 12, 2021

Best answer: I've worked in the insurance industry for most of the last ten years, and so my advice is to spend ten years working in the insurance industry. You learn a lot! Hahaha! But seriously...

Getting right to the point, if you're eligible for USAA, get USAA. It's the best, hands down. Every once in a while, you'll hear someone say that they've gone downhill and that they're not what they used to be, which is an easy way to determine that that person has never had any other insurance company. USAA has quite a bit of room to decline even further before anyone else is close to them.

If you're not eligible for USAA, Amica is generally considered the best. They only write in a few states, and they're somewhat pricy, but the service is excellent.

The company to avoid is Allstate. There are anecdotes to the contrary, but again, with ten years in the industry, I've seen enough to say both that their service is crap and that they have an unsavory habit of raising your rates significantly for no reason with as little warning as legally possible.

I've spent most of my career working with independent agents, and so I'm probably a little biased, but I honestly believe a local independent agent is the best way to buy insurance. Independent agents (as opposed to captive agents) sell for multiple companies, so they have both a good sense of the overall market and also the ability to move you to where you need to be in that market if it changes. You could probably buy a house without a realtor, but the realtor's professional knowledge makes the process a little easier for you. Insurance agents are the same thing, only for insurance instead of houses.

And, as everyone else mentioned, if something does go wrong (and not necessarily claim-related; maybe you've got an issue with billing or something), you don't have to deal with the insurance company's bureaucracy yourself. You have someone to do it for you. Even people I know who work in the insurance industry take advantage of this, because insurance is so complicated that even people who have a pretty good idea of what they're talking about still get confused. Again, delegate to professionals.

Captive agents will do the same thing for you. The only difference with captive agents is that they don't have the ability to compare companies. If you go to an independent agent, they'll give you quotes from ten different companies. If you go to a State Farm agent, you're only going to get a quote from State Farm. That's not necessarily bad; State Farm is a good insurance company, and their selection process for agents is legendarily difficult. But it's hard to evaluate without something to compare it to. Of the captive-agent companies, State Farm is definitely the best. They're generally on the more expensive side, because their target market is extremely low-risk, and if you're the kind of person who can afford to be that low-risk, you're also probably the kind of person who will pay $20/month more for insurance, so State Farm doesn't try to compete on price as much as other companies. But the service is good. You get what you pay for there.

Then there are direct-to-consumer companies. In 2021, almost literally every insurance company is direct-to-consumer, but for some, it's a bigger part of their business model than others. Progressive, most notably. Generally, avoid these. There might be some savings, but like I said, insurance is complicated, and with DTC you're dealing with the company directly. If you really like those Flo commercials and want to buy Progressive insurance to support their advertising, the vast majority of independent agents have a contract with Progressive. You'll get the same (or better!) rates you would get directly, but you'll have an agent helping you when things go wrong.

(On that note, be aware that Geico is not an insurance company; it's just a really, really big agency. Geico does not write any policies of its own. It sells policies for other companies, most notably Travelers, who is otherwise a reputable company. Going through Geico is the same as going through a local agent, but instead of an agent who lives in your neighborhood and knows your dad and coaches Little League baseball, your agent is an 18-year-old in a call center in Alabama, and a different one each time you call. Don't go through Geico.)

Connect by AmFam is two things, a DTC company with no agents and a "little brother" company. Neither are really desirable. The Costco connection is spurious; it's common for companies to partner with other organizations as a way to generate leads. E.g., The Hartford is the "official insurance partner" of the AARP, so a lot of old people have insurance through The Hartford. More concerning is the "by AmFam" part. American Family is a reputable insurance company, but this isn't American Family. A lot of insurance companies will buy smaller companies with different market positioning as a way of dumping off their less-desirable policyholders (which is to say, people who have had claims, or younger drivers, or houses in high-crime areas). Liberty Mutual owns Safeco, for example. It's not necessarily a bad thing. Safeco is still decent insurance. But knowing that it's owned by another company, the question you should be asking is, why go through Connect when you could go through American Family itself? From the company's perspective, Connect is giving you a low rate because they need low-risk people to buy policies in order to subsidize their higher-risk clients. To some extent, that's true of all insurance, and maybe this is me being old-school, but it rubs me as a cheap marketing gimmick. But that's not terribly important, because the bigger issue is that its DTC, and you should go through an agent instead.

As it happens, there's a really easy way to evaluate local agents. Google "insurance agent [your town]", and then email the results asking for a quote. The ones who get back to you the fastest are almost certainly the best. Insurance sales is an entirely commission-based business, so they're extremely incentivized to sell. If they aren't quick to respond when their income literally depends on it, they'll be even slower to respond when they're doing things that don't make money, such as helping with a claim.

If you'd like a little more professional guidance in finding an agent, the Big I and your state PIA are professional organizations for agents, and they would be able to recommend agents in your area. Your bank could almost certainly recommend someone as well. Because of the relationship between mortgages and home insurance, the loan officers at the bank spend a lot of time dealing with agents, and they can tell you who's good. If it's a bigger bank, they might even have their own agency. Too big (like Wells Fargo/Citi/Chase/BOA big), and you'll run into the Geico problem, though. And if you've never heard of the companies you get quotes from (not that unusual - there are hundreds of small regional insurers out there, most of whom have outstanding service), AM Best is an organization that grades insurance companies' finances.

And finally, I am at your service if you have questions. Feel free to MeMail me. My experience is generally in the Great Lakes and New England area, but I've worked with agents from Utah to Texas to North Carolina as well. I'm happy to answer questions.
posted by kevinbelt at 7:40 AM on August 12, 2021 [32 favorites]

Excellent answer, kevinbelt, very informative, thanks!

Wondering if you have an opinion on insuring with AAA?
posted by Rash at 8:04 AM on August 12, 2021 [1 favorite]

I don't have a ton of experience with AAA. A lot of the agents I worked with had contracts to sell AAA, but no one ever really talked about them, good or bad. They're just kind of a middle-of-the-road company. If you like your agent and get a good rate from them, go for it. But I also wouldn't single them out as being particularly good.
posted by kevinbelt at 9:29 AM on August 12, 2021

just to be clear Geico writes auto risk and agents everything else.
posted by JPD at 9:46 AM on August 12, 2021

Best answer: So the thing about insurance companies is that most any you've heard of will usually be pretty good, but they will also really suck sometimes. A friend had a house fire and State Farm was great. Agent came out within the hour and gave her some cash to tide her over, paid for her dogs to be boarded, arranged for a company to come out to attempt to salvage her personal belongings, and even paid us for the time she stayed at our house. (We didn't ask, they literally insisted) They were also reasonably good on my SO's auto claims. Plus the price for home and auto was very reasonable.

However, there is still no shortage of horror stories about them and every other insurance company out there. When things go smoothly, they're all pretty good. When there are gray areas in the policy language or (founded or not) suspicion of wrongdoing on the part of the policyholder, they'll do the Jekyll and Hyde routine before you can blink an eye. That's just how insurance is, especially when they're already having a bad year financially and looking to minimize or deny claims.

What's most important is to read your policy documents so you know what is covered, what is excluded, and what your responsibilities are. They may be friendly sometimes, but they are not your friend.
posted by wierdo at 9:52 AM on August 12, 2021

Mirroring kevinbvelt's good advice, I've had Amica for years and they are excellent.
posted by medusa at 11:50 AM on August 12, 2021

One further piece of advice, if you happen to be in New England and/or if the company has installed key-logging software on my computer: Concord Group Insurance is just the best!
posted by kevinbelt at 12:02 PM on August 12, 2021

Response by poster: Thanks kevinbelt - that was a super thorough answer.

I don't qualify for USAA or Amica, but I'll give the independent path a shot.
posted by FlatHill at 10:06 PM on August 12, 2021

Consumer Reports rates insurance companies.
posted by postel's law at 9:42 AM on August 13, 2021

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