Insurance. Duplicated Insurance Wastes Money.
Insurance
The insurance industry is a multi-billion dollar market that’s worth an estimated $2.1 trillion worldwide.
But what happens when you have two or more separate policies for the same thing? It might seem like it would save you money, but in practice, this can do the opposite. You’ve probably been told to purchase both your home and car insurance in order to protect yourself against the unexpected. But this can lead to double payment for both policies if something happens to your car or house.
Before insuring your car, you should also insure it if you plan to insure the value of whatever it is that you want to drive in case of an accident. If one of your cars, for example, is worth $10,000 and the other is only worth $5,000 then you’ll be looking at a combined total value of $15,000. Due to this discrepancy between each car's individual value, it would make sense for you to purchase two insurance policies for each car so that the total amount will reflect the two individual values. If something happens to one car but not the other in an accident or theft then both policies will cover it.
Otherwise, say if you only had an insurance policy for the $5,000 car and something happened to the $10,000 one, you would only be paid $5,000 or whatever your insurance will cover under the policy for the lesser valued car. So instead of having to pay twice as much for one separate policy for each car, you’re able to pay less since they’re both covered by two separate policies.
Another example would be insuring both your home and your possessions inside of it. If you want to receive full compensation in case of a fire or burglary at your home then you should get two separate policies from different insurance companies. Since you’ll also be paying two separate premiums, it is actually cheaper to do this than a single policy that includes both your home and the possessions inside of it.
If you ever decide to improve or upgrade your home, then you’ll have to look into obtaining a new policy that reflects the current value of your home instead of locking yourself into an outdated coverage amount. Although, if you still want to maintain a single insurance policy for both your possessions and your home then it might be worth finding out if anyone offers different policies based on the area and location of each part. But this will require some research and comparison shopping.
Community Rating
Another way that insurance can save you money is by combining the risk factors for multiple parts of a single equation into one premium. A policy called community rating allows insurance companies to raise or lower your premium based on how similar you are to other people in your neighborhood, whether they’re household members, relatives, friends, or coworkers. For example, if another person in your neighborhood has had his policy canceled and is living off of welfare for an extended period of time and you have no history of such behavior then the insurance company might decide not to raise your premium since it would be unnecessary.
But if the insurance company has their eyes on you and sees you as a high risk then they might decide to raise your rates or cancel your policy altogether. These are some of the things that insurance companies look at when they’re establishing community rating systems:
● Length of time your policy has been in effect ● How long it’s been since you have filed a claim ● Your age • Your marital status ● Your occupation ● Your credit score/ history ■ Any special discounts that you qualify for based on being a member of a group or organization
With this type of rating, those who live in areas with higher premiums will pay less than those who live in lower risk areas. If you think that your neighborhood is going to be a high risk area, then you should shop around for a policy that offers lower rates for others with similar risks. Or if you live in an area where everyone’s insurance rates are almost the same then you can get not only coverage for your home but also motorcycle and car insurance as well.
One of the more popular community rating systems is used by Safeco, who ranks the riskiness of every neighborhood in Washington State based on factors like proximity to schools, income level, crime, and weather. They base their community rating system on individuals’ home addresses and other information they have available to them.
Aside from community rating systems, there are also several other ways that insurance companies can set premiums for their customers. Whether they’re using household income or the value of your car at the time of the claim as a basis is really up to each individual company to decide.
Get Your Car And Home Insurance Posted Online Now!
Saving Money On Auto Insurance? Try Our Free Car Insurance Quotes Online Now! Click Here To Get A Free Quote Start Planning Today, Your Information Is Secure With Us.
For the best car insurance in Seattle, WA call (206) 310-5310.
Washington Auto Insurance Agents by City
Pacific Northwest Information Directory
Join our email list for the latest news and updates. Plus receive 10% off your next purchase! Don’t worry we hate spam too! Enter your email below for special offers only from Safeco Insurance! Join Our Email List Today and Get 10% Off Your Next Purchase!* *Restrictions Apply *Valid only at www.safecoinsurance.com/emailoffer or with agent, coupon code 8B67Y2C5X at time of purchase. Not valid in Hawaii or New York City. Offer is non-transferable. All offers are subject to change without notice.
Related Pages and Sites of Interest
Home Insurance Quotes - Save up to 60% when getting a home insurance quote from licensed local agents around you. Over 170 different companies to compare with!
Insurance Agents In Seattle - Get free quotes from licensed agents in areas of Seattle, WA until you find the best insurance company for your needs! Search by address or zip code today!
Insurance Companies In Seattle - Get free quotes from licensed insurance companies in communities around Seattle, WA. Compare rates and availability instantly! Find the best company for your needs and budget.
Conclusion
Hopefully, you now have a better idea on how to compare insurance policies, what to look for in an insurance company, and how to find the right one for you. If you’re still looking for a good way to save money on multiple types of coverage then it would probably be smart to use the four tips above.
But if you’re comfortable with your current policy and plan on sticking with it then there is no need to change your existing insurance. But if you’re like most people who are in search of savings then take advantage of any discount opportunities that come your way as well as those that are offered solely by an insurance company.