Home Mutual Insurance
What separates mutual insurance policies from all other policies is that if you are a mutual insurance customer, you share a portion or all of the profits. For instance, if you buy a home mutual insurance policy you might receive a dividend, or payout, every year that the company makes a profit. It might be 20 dollars or 200 dollars.
The amount of money depends upon the mutual insurance company's profits that year and how much business you conduct with them.
For instance, if you purchase three different policies from the same mutual insurance outfit on your new car, new boat and house, you would receive a greater dividend than someone insuring a modest 20-year-old car that's driven 300 miles per year.
Use the FREE comparison tool above to start searching for home insurance quotes!
Types of Insurance Companies
Now you are familiar with one variety of insurance carrier. The rest are stock companies, captives, risk retention groups and reciprocals. Stock companies are owned by shareholders and answer to them.
A captive is an insurance company that exists within an organization to provide its insurance coverage. Risk retention groups provide liability coverage in the commercial arena typically for products and across groups that face similar risks.
Reciprocals is the final group and provides insurance to its members, or subscriber. Typically, you only need to know of publicly traded companies and mutual insurance carriers.
Policies of Primary Importance
Before you rush into signing up only for the first mutual insurance company that comes along, make sure you evaluate all of your options.
You might receive the best value for your money form a larger public insurance carrier or another mutual insurer. Just because they send you a check does not mean you are getting the best rate either.
Make a Quote Comparison List
When you request a quote it helps to make a checklist. Prioritize what you want out of your next insurance policy and insurance company.
Consider including some of the following items:
- General customer service
- Customer satisfaction with claims process
- Efficiency of claims process
- Policy Premium
- Coverage
- Discounts
- Credit Worthiness of Insurer
From this list, you see that the actual coverage itself is important, but not the only factor to evaluate when choosing an insurance company to protect your house. Every carrier should adhere to your desired coverage limits.
Be careful not to wrongly associate higher premiums with better quality services or a better insurer.
In truth, you might find the least expensive of carriers may be more efficient and fair in processing and paying claims, while offering excellent customer service. Along the same lines, be sure to check out each insurance carrier's financial ability to pay claims.
That's what the credit worthiness will indicate. Check out AM Best for that information.
When to Discount a Discount
When you are comparing quotes make saving more money a priority. Try out different types of discounts, but again, do not be lulled into false sense of savings. Just as a mutual insurer might cost more than the competition despite tossing you a dividend check annually, multi-line discounts may not be your best bet.
It might feel a little out of hand when you have to look at the amount of money your auto and home policies cost, minus a 10 percent discount. Yet, if your house insurance is 5,000 dollars and your car insurance is 2,500 annually, and you save 10 percent, that is 750 back in your pocket.
On the other hand, if you find a fantastic, customer-oriented insurance carrier who has an excellent credit rating and saves you 1,800 on car insurance and another 400 dollars on homeowners, guess who wins out? You do, if you choose the carrier who charges you less than the carrier dangling a 10 percent discount off high premiums in your face.
The same holds true for a carrier who contacts you from your alumni association, offering a discount to everyone who graduated from your college. It might be a great deal and it might just be a ploy for them to make more money. It's worth your time to evaluate your options and not be too attached to any one carrier.
Now imagine that the carrier who gives the lowest premium and best overall service also offers a 10 percent discount. That is a winner and your next insurance carrier.
Is customer service subjective?
The answer is yes and no. It's up to customers to talk about their experiences with their insurance company. More likely than not, you will hear the horror stories only once a customer goes to file a claim. Yet, every insurance company will have disgruntled customers.
Some just have a greater share of horror stories. So how are you to evaluate the service then?
Check online and you will find a treasure trove of information about claims experiences that are both good and bad. Look for side-by-side comparisons that call out the best companies that are loved by consumers.
Review Insurance Basics
If you are still stuck on what to look for you in your coverage, review the basics of insurance. The American Insurance Association provides a thorough guide.
Another helpful but also fun application takes you through the inventory process.
Buying Sufficient Coverage
When insuring your home you need to know how much insurance to buy. Do you protect the mortgage, the house valuation according to the real estate market, your savings or what?
A lot of homeowners get confused when trying to decide what they should use to demarcate their coverage limit. The purpose of buying coverage is for the worst-case scenario: having to rebuild your house. The mortgage and real estate value of no consequence to this situation.
What is most important is instead knowing how much it would cost to rebuild your house. To find out, hire a housing appraiser and a contractor. Get their estimates in writing and keep them alongside your household inventory, offsite from your house.
In case of total destruction of your house and belongings, you will have access to the backup documentation that defines what you had in your home and how much it costs to rebuild. More about the inventory. Most homeowners actual do put together their person possessions inventory for their insurance.
Counting and Pricing Your Belongings
Sounds like running your own store instead of a household, but an inventory provides crucial information if you ever need to file a claim. Include serial numbers, descriptions, photos and/or video and receipts, if you have them.
Many sites online include templates for your household inventory. Be sure you have several copies kept on the cloud, offsite and another in a different region of the country.
Play it safe and be wise with your inventory. The inventory, ability to access it and having thorough information make the claims process more efficient. That benefits everyone in your house.
When buying coverage, evaluate your options, prioritize your needs and be sure to include a household inventory. If a mutual carrier offers the most competitively priced policies for you, then you may receive dividends annually.
Do what works for you and enjoy peace of mind in your home. Be sure to compare insurance quotes using the FREE search tool below instantly!