A recent study by J.D. Power and Associates, a well-respected global marketing research and information services company, found approximately 74% of those shopping for insurance begin their search online through the use of insurer websites or aggregate companies that provide multiple insurance quotes from numerous insurers. And, while it’s true that many shoppers are obtaining online quotes for various insurance policies, only about one-quarter of them actually purchase their policy online. About 50% are estimated to actually buy their coverage through direct contact with an insurance agent.
What To Look For
The I.I.I., Insurance Information Institute, recommends obtaining a minimum of three quotes when shopping for insurance, which you can either do yourself or, to save considerable legwork, have a reputable aggregate company do for you. It’s important to, as they say, compare “apples to apples,” which means comparing policies with similar benefits, the same deductible, the same caps (if any) on payoff amounts and the same exclusions.
Homeowners insurance quotes online will specify whether a policy is “open perils” or “named perils,” which can make a significant difference in both benefits and premium costs and should be closely studied during any comparison. Perils are risk conditions for which you purchase homeowner’s insurance such as fire, wind storms, theft, etc. An open perils policy will cover any damage or loss suffered by your home unless it’s specifically excluded by the terms of your policy. A named perils policy covers only those losses specifically itemized in the policy. One of the most commonly sold homeowner’s policies, the HO-3, is a hybrid, with open perils coverage pertaining to the dwelling but named perils coverage pertaining to the contents.
Replacement Cost Coverage
Another important factor to look for when comparing homeowners insurance quotes online is whether full replacement costs on structures and contents is provided at no additional cost. As you can see on this chart, an HO-3 policy only provides these full replacement cost benefits for an additional premium charge and there’s a 125-150% cap on dwelling replacement. With the more comprehensive HE-7/21 coverage you get guaranteed full replacement coverage (without depreciation) for both dwelling and contents included.
There are a lot of other differences in the two policies covered in the chart. An interesting note: the HE-7/21 policy is not offered by your typical single-insurer agency but only through Independent Insurance Agents. This an important factor that sets the Independents apart.