Insurance and The Power of Choice

Once you have been preapproved for your new dream home and have found a lender, it’s time to start shopping for insurance rates. Although you don’t need to be an insurance expert (that’s the agency’s job), it’s important to make informed decisions with the help of an agent who has the power to pick the right company for you based upon your specific needs. Scott and Ryan Sacchieri with Goosehead Insurance answer some of the most commonly asked questions surrounding the topic, including the difference between captive and independent agents, bundling, and flood insurance in preferred risk and non-preferred risk zones.

1. What is the difference between a captive agency and brokerage?

The main difference between a captive agency and an independent broker is the power of choice, which is of paramount importance when it comes to choosing your insurance. Whereas a captive agent is contracted to work for a single insurance company and can sell only that insurance company’s policies, an independent broker such as Goosehead has 30+ insurance carriers that they can use to shop the entire Texas market to find the best coverage for you at the best price.

2. How do I decide what policy to choose from?

Whenever you’re looking at different quotes, one thing to consider is that not all insurance policies are created equal. There’s a big difference between different companies, different carriers, and different policy forms. It’s important when you’re talking to somebody that they know your needs and can recommend the right option for you.

3. Do I need flood insurance in a preferred risk zone?

Flood insurance over the last 2 years has been a huge topic in the Houston area due to the Tax Day Flood and Hurricane Harvey, during which the city experienced unprecedented levels of flooding. What’s more, the Houston Chronicle reported that over 240,000 houses were damaged, 75% of which were in a preferred risk zone. For these reasons, it is most likely in your best interest to get flood insurance regardless of where your house is located or how elevated it is. At the moment, the most that you’ll spend on a flood policy in a preferred risk area is around $480, which is a small price to pay for peace of mind.

4. What are the best ways to save money without sacrificing coverage?

There are several different ways to save money on your insurance without sacrificing coverage, the first being bundling your home, auto, etc., potentially saving you between 5-25% on each policy. Additionally, your agent should ask detailed questions about the home that you’re buying, such as how old the roof is or if the plumbing has been updated. These key factors will play a major role in the pricing of your home policy, as will being able to shop several dozen carriers. Not every customer is the same and one policy will not match every client, which is why having an independent agent with the power to pick the right company for you based upon your specific needs is crucial in saving you money.