Tips on how to Submit an Accurate Home Insurance Quote Online

home quote

Part 2 of completing accurate insurance quotes online looks at home insurance, and some of the common errors often seen. ( See part 1 – auto insurance here).

Here are some of the most common errors;

  • Replacement cost
    • This is often one of the main discrepancies from online quotes, resulting in inaccuracy. Sometimes this results in predicting insurance cost that is too high, but more often than not, way too low. When inputting replacement cost online, we often hear from new home buyers, “I chose that number because the land is worth something, so I subtracted 20% from what I paid for the house”. Purchase price is not an accurate indication of replacement cost for insurance purposes. It’s perhaps a good starting point, but the purchase price of a home in Toronto is different than in Ottawa, however replacement costs are often similar. Keep this in mind when choosing your replacement cost.  
    • The age of home also seems to hinder an accurate replacement cost for many online quotes. Some people tend to think if your home is older it costs less to rebuild, when often the opposite is true. A lot of older homes are built bigger and with stronger, more durable materials. This results in a higher replacement cost if it had to be rebuilt today.
  • Home Insurance and the use of Credit
    • More and more things are using your credit score these days, including home insurance.  When completing an online home insurance quote and you are asked very bluntly about using your credit rating, it may seem very intrusive; however, it is one of the primary rate factors for home insurance.  By saying “no” to this question, the quote with all markets that use the credit rating factor, will be inflated. Usually, answering “no” results in the insurance company defaulting to the rate factor of the lowest possible credit scor. What does this mean in terms of the quote? It could result in your quote being thousands of dollars more expensive than if you had allowed the credit check.
    • Be wary of quoting sites that do not request permission for the use of credit.  You are required to provide consent, however not all sites are as up-front about it.  Perhaps you agreed to their “terms” that might have small print providing permission to check your credit.  Inevitably, the vast majority of the time, a quote from a site that has checked credit (whether you know about it or not) will be cheaper than one that did not.
  • Do you own or rent?
    • There are many different types of home insurance. There is Home insurance, Condo Owners insurance, Rented Dwellings insurance, Rented Condos insurance, and Renters insurance (also called tenants insurance). These all have different rate factors, criteria to qualify, and coverage.  Knowing what you have and what you need is the first step. The most common mistake I see on this topic are landlords who have bought a 2nd or 3rd house, and start looking for homeowners insurance. It’s often not until we are well into the process that they tell me “oh sorry, I don’t live there, I live somewhere else”. This will then change the quote entirely as it’s no longer a homeowner insurance policy they are looking for. What they require is a landlord insurance policy for a rented dwelling.

There you have it, you are now an expert on doing online quotes for your home and auto insurance.

Brian Cummings

brianc@rhodeswilliams.com

Account Executive