Does A Name Brand Really Matter in Home Insurance?

As an independent insurance agent, we can work with a host of options for your insurance needs. The reality is that some of these you have heard of, like Travelers, Progressive, and Nationwide. And some of these you may not have heard of, like Encompass, Cypress, and State Auto. The question then becomes does it matter if you have heard of the company when it comes to home insurance?

The single most important thing to consider when looking at a home insurance policy is does it cover what I want covered and will they pay my claim if the time comes to use it. The moment to use the benefits can come at any time and in many ways. Over the years, we've seen many companies have spells where they have claims processing problems. Including the ones with names you recognize. If you google for reviews of various insurance companies, they all have dedicated web pages of "________" sucks it seems like. People have bad experiences. Brand name doesn't change that at all! So how can we really know?

1. If you have friends that are local contractors like roofers, ask them what they think. Contractors who deal with a lot of insurance claims will be able to quickly tell you who they like dealing with and who they don't.
2. Look at financial ratings. There are generally two major ratings organizations, with one being much larger. AM Best issues a financial strength rating based on traditional methods of insurance companies known as reserves. Reserves are accomplished by stockpiling cash for a rainy day. Demotech has been around a shorter time period and works with companies that use a less traditional method of reserves known as reinsurance contracts. Rather than building up deep pockets of cash, they take out insurance on themselves to cover large catastrophic losses. Both scenarios have their merits. The further down the scale you go with both of these, the lower the ability to pay claims in catastrophe situations.
3. Speak with your independent insurance agent about their experience with the companies in question. Agents have been through this process many times and can steer you in the right direction based off of what their customers give as feedback.

So if some of these companies are so great, why have I never heard of them and how are they so much cheaper?

It's always a question that comes up. People are fearful of the unknown and being taken advantage of, and we are right there with you. You know about lizards, the professor, and Flo because of advertising. Guess what, advertising costs money. Some of the companies that we use do not advertise during the Final Four, The Masters, or baseball games. As a result, they don't have some clever marketing figure, and rely on independent insurance agents to match clients to their products. They pass on the savings in marketing costs to you the customer in the form of lower premiums. We view this as a great thing!

If you wonder if you are paying too much, are with a great company, or if you have the right coverage feel free to schedule a time to speak with one of our trusted agents. Insurance For Texans is here to make home insurance easy to understand and use!