As drivers, we humans can make bad decisions and cause accidents.
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When you’re just starting out, it often seems that a dollar never stretches far enough.
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Moving. It can be the best of times. It can be the worst of times. But for better or worse, the average American will change homes 11.4 times during his or her lifetime. Amid the excitement and stress, it’s easy to forget that moving will affect your home and auto insurance. You'll want to be prepared to avoid any additional stress.
Changes to Your Home Insurance
When you realize a move is in your future, turn to a Trusted Choice® Independent Insurance Agent for help. Here are a few subjects you’ll want to discuss:
• Your current home. If you’ve accepted an offer to sell, remember that a fire, windstorm or other damage could easily delay closing or even cancel the sale. An agent can assist in making sure the insurance coverage lasts until the ownership change is formalized.
• If you’ll still own your current home while living elsewhere, your agent needs to know immediately. Failure to inform the insurance company that a home is no longer owner-occupied can significantly affect or even eliminate coverage on it.
• Can you keep the same agent and insurance company? Your current agent and insurance provider may be able to write the policy on your new home, transfer any credits you’ve qualified for and apply any premium you’ve already paid. But if your current agent or provider doesn’t operate in the area where you’re moving, a Trusted Choice agent in your area can help you.
• New neighborhood. New rules? A Trusted Choice independent agent can also offer information about differences in insurance rules between one location and another. For example, your new home may be in a designated flood zone and require flood insurance or be in an area where policies include a separate deductible for windstorms.
• What about personal property? Your stuff is important! Whether you own or rent your current and new home, talk with your agent about how coverage will apply:
1. If your property is damaged while it is being packed or is in storage or transit.
2. If your property is damaged while it is being unpacked at your new place or after it has been moved.
If you need more coverage, an agent will help you explore options. Also, if you are hiring professional movers, remember that they are required by federal law to provide at least a basic level of liability insurance with additional insurance available for purchase.
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Before we dive right in, we want to first touch on how rates are determined. Insurance can be complex and frustrating, so we hope to provide a little bit of clarity. It’s common to be confused by the following: Homeowner A and his/her neighbor, Homeowner B, both owning similar homes, are paying very different insurance rates. Driver A, with two teenage drivers, pays much more in premium than Driver B, with two teen drivers. What gives? How are insurance rates calculated and what factors are affecting these rates?
How Are Insurance Rates Determined Anyhow?
Most insurance rates start with statistical analysis and mathematic calculation. Actuaries use historical data and the cost of past losses by groups of consumers with common characteristics, to help develop base rates for these consumer segments. These base rates are then provided to underwriters to shape the final rate. Underwriters take base rates and factor in more individualized characteristics of policyholders. Once Underwriters factor in more specific variables to estimate the expected value of any future losses, a premium is charged that corresponds with the level of risk that a policyholder represents.
These predictive and risk-based rates help to protect consumers. Historically, this method of rating has proven to be an incredibly accurate predictor of future losses, which ensures that an insurance carrier can pay on potential claims and, of course, earn a profit.
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