Shopping Insurance and Landing at Allstate

Posted by Madison on June 1, 2009

I mentioned that we switched our insurance to Allstate earlier this month.

Since I used to work in the insurance industry, I actually didn’t shop our rates very often. Because of the state filings, I knew that we had some of the best coverage and premiums around.

Everything changed when we decided to enter the landlord business. We needed to secure insurance for our rentals and our current company wasn’t competitive in that area, so it was time to shop.

Getting Quotes

I’m a fan of getting quotes from multiple carriers all at once. Before we got quotes, I checked our credit scores since most of the carriers in our area use credit scoring to determine insurance rates.

We got quotes from 3 of the top competitors in our area, and began the comparisons.

Comparing Coverages

It’s actually really hard to do an apples to apples comparison. Lots of insurance companies have special programs and extra coverages that others don’t. In addition, because of multiple policy discounts, it’s important to shop all your policies at once.

For example, our old homeowners policy had land coverage, which is why the digging was covered when the water pipe burst under our front lawn. However, that same claim also requires us to use a $6,000 deductible with Allstate.

Allstate doesn’t cover land, nor do they cover earthquakes in our area. So, a direct comparison of premium isn’t the best way to compare. I called my current insurer to get a comparable quote without the land and extra coverages we have, without earthquake coverage, and with the higher deductible.

Allstate Pros

Landlord Policies. When I mentioned the landlord policy, it’s where Allstate wins hands down. Allstate has the ability for our personal umbrella coverage to provide excess liability on our landlord’s policies. It enables us to buy a lower liability policy on the rental but still get the coverage we want through our umbrella policy, something many of the other companies, including our current insured, don’t offer. This will save us multiple times, every time we buy another rental property.

Low moving violation charges. Scott has a speeding ticket, and of course, now so will I. However, it only added $9 to our six month premium, which is a substantial difference from the 20% increase (about $50) we saw with our current insurer.

Shop ahead discount. Allstate has an interesting discount, one for purchasing your coverage a week before you need it. Since we still have coverage with our old insurer, it was a no brainer. It was a discount that I haven’t seen before.

Low premiums. Allstate had the lowest quote of the companies we shopped. For those wanting to save money, obviously, this is a big plus.

Allstate Cons

High Deductible. I had a hard time agreeing to a $6,000 deductible. I’m always in favor of carrying high deductibles, but when I think of high, I usually think of $1,000 or $2,500. I’ll probably lower it once the 3 years have passed from our digging claim.

Limited coverages. As I mentioned, getting rid of land coverage and earthquake coverage was a hard decision for me. Normally, I would never insure land, but since we actually needed that coverage last year, I was glad we had it.

In addition, I’ve always carried earthquake insurance, even in Wisconsin, because of the New Madrid Fault line. Think I’m crazy? Maybe, but the New Madrid Earthquake of 1812 paints a very interesting picture. In addition, because my background is in risk management, I’ve read way too many journals about Midwestern earthquake projections.

New Premiums

Our new premiums will be $1945 per year (for 2 cars, a house, and an umbrella). Comparable premiums at our old company were $2140. So it’s a “savings” of $195. Add in the $500 savings on the landlord policy and we came out ahead.

But, we had to be comfortable without coverage on earthquake, land, and having a $6,000 deductible instead of $1,000. We used to pay an additional $540 per year for those coverages, so instead I’ll put that money, plus the $195 in savings into a savings account earmarked for a loss.

We ended up moving our umbrella, homeowners, and auto policies to Allstate. We didn’t move the motorcycle, since we insure that separately, and the quote from Allstate didn’t come close.

Have you shopped your insurance policies lately?

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Comments to Shopping Insurance and Landing at Allstate

  1. I am just curious — did you compare the quotes by checking with and independent insurance agent / broker? The independent agent should be able to provide a number of quotes. Or did you contact agents from each of the Insurance companies directly?



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