The Right Way to Evaluate and Compare Insurance Quotes
The biggest mistake people make when securing coverage is shopping for insurance like they shop for clothes — simply try on a few shirts, slip on a few different pairs of shoes, compare prices, and buy the best quality for the lowest price. Unfortunately, your new insurance policy requires a bit more attention, and a lot more knowledge.
Getting multiple quotes is smart — but when it comes to insurance, what you’re buying matters more than what you’re paying.
Whether you’re a service provider, tradesperson, or operate a hybrid team of remote and in-person staff, here’s what every small business with up to 10 employees should know about protecting themselves from costly insurance blind spots.
The Fine Print Is Where It All Happens
Let’s say you need homeowners insurance and collect three quotes. Quote A is the cheapest, so it must be the best deal, right?
Not so fast.
Insurance pricing is directly tied to coverage, and coverage varies more than most people realize. Many insurance quotes appear similar on the surface but are built on entirely different assumptions under the hood. Three different agents could submit three different quotes using completely different limits, deductibles, or rating factors — all of which affect what you’re actually covered for, and how much you’ll get if you ever need to file a claim.
At ArcLight Insurance, we’ve reviewed policies where clients thought they were covered, until they weren’t. For example:
Actual Cash Value (ACV) vs. Replacement Cost (RC)
- Many homeowners are shocked to find that their roofs were insured at Actual Cost Value, meaning the value of their roof is reduced based on depreciation. Your 15-year-old, $25,000 roof? Might be worth $2,000 on paper. After your deductible, you may get nothing from your claim. In contrast, a Replacement Cost policy would cover the full cost to rebuild the roof with like kind and quality — no depreciation deduction.
Missing Endorsements
- One common omission we’ve seen is the lack of Personal Injury coverage on landlord policies. This coverage protects against lawsuits for wrongful eviction or invasion of privacy, which is highly relevant in today’s rental landscape.
4 Main Clauses You Should Look For in Your Insurance Policy
Here are a few examples of things you need to review when comparing insurance quotes:
- Coverage limits: Are they adequate for the value of your home and belongings? Your home’s replacement cost valuation should be sufficient to cover the cost of a total loss to your home. That includes debris removal, architectural plan costs, the contractor’s fees and costs, and finally, all of the materials needed to rebuild your home. Don’t forget the additional costs to rebuild your home with today’s building code requirements, such as fire suppression systems and upgraded electrical requirements.
- Deductibles: Higher deductibles can lower premiums, but will you be able to afford them if something happens?
- Endorsements & exclusions: Are there special riders for valuables like jewelry, art, or collectibles? Are common perils excluded? Your belongings are covered worldwide. So if you are snorkeling in Thailand and you lose your wedding ring, it will be covered as long as it is “scheduled” on your policy.
- Settlement terms: Is your roof, for example, covered at ACV or RC? Are belongings covered at replacement cost?
Changes That Should Trigger a Policy Review
Making well-informed decisions on your preferred policy is not just about comparing quotes. It’s also about keeping your policy up to date. Here are some common life changes that should prompt a conversation with your agent:
- Home renovations or additions.
- Buying expensive electronics, jewelry, or collectibles. Homeowners policies have what we call “underlying” limits for jewelry, firearms, or collectibles. For example, the total underlying limit for jewelry coverage might be $1,500 or $2,500 with no one piece of jewelry being covered more than $1,000. That means if your wedding ring costs $50,000, unless that ring is scheduled on your policy, the most the carrier will pay in the event that ring is lost or stolen is $1,000.
- Upgrading appliances or furniture.
- Taking on new tenants or renting out a property.
Many people forget to update their policy, only to discover too late that their new purchases weren’t covered.
Skip the Guesswork, Use a Trusted Insurance Agent
The biggest mistake people make is assuming all quotes are based on the same inputs. Understand: insurance quotes are not interchangeable. They reflect different coverage decisions, underwriting assumptions, and risk calculations. The only way to make a smart decision is to understand what’s in the policy. That’s where we come in.
At ArcLight Insurance, we believe an informed client is a protected client. That’s why we never just “run the numbers” and leave you to guess. We review every quote with our clients to help them understand not just what they’re paying, but what they’re getting.
We believe knowledge is power, and the more informed you are, the better decisions you’ll make about protecting what matters most.
Start your FREE quote with ArcLight Insurance today and get covered with confidence, because the best price means nothing if your policy doesn’t pay when you need it to.