What price do you really pay for your auto and home insurance?

With several hundred companies offering auto and home insurance in the U.S. you would think a bit more variety would exist.  The reality is that the majority of them are after the same demographic; good to great credit, home ownership, college educated, multiple cars. Then there is everybody else.  With a constant turn over of actuaries and heads of underwriting everybody else inevitably can get luck and fit into a preferred companies model.  Generally due to a fluke in the sophistication of underwriting.  But the reality is still that there are only three prices available to the public and YOU choose your price.

1. Best(see lowest)Price; reality is this is all on you to get the lowest.  If you really wanted this you would have to spend several hours on the phone and computer.  I am not aware of ANY agent who has access to every company and as of this post there is not an website with all of them either.** It’s coming**  So now what?  Be sure to decide on your coverage before shopping.  Also realize that you may have never heard of the company you end up with.  Also realize that the spread from the lowest to the highest rate may be 100% different but it is likely 1-5% in the lowest five options.  Was it worth the time?

2. Fair Market Price; this is what most people have.  Your rate is likely in the top 5-10 available rates and is solid.  Sure you can save a little bit but is it worth the time?  Is it worth any technology sacrifices?  Is it worth losing an agent(friend you buy insurance from)  To you it probably is not.  This is ok.  Honestly I think this is where you want to be.  Remember saving more than $300 or so between your auto and home is not a good thing.

3. Loyal Price:  Here is your warning.  If you are with an agent who only has one company in all likelihood  this is what you have.  Take comfort in the fact that your agent is doing the best he/she can with what they have.  In my experience(11 years worth) for most of your time with this company you will be closer to the top end of fair market than at the lowest.  But hey, you are supporting a person you like, I hope, and hopefully they bring more  to the table than just insurance.  Maybe some business acumen, maybe some friendship, maybe referrals, etc.

What do all three have in common? You choose which one you have.

Thanks, just some thoughts.