Is a free vacation hiding in your escrow account?
“How would you like your next year’s worth of vacations to be free?”
A very common activity on any given day is adding mortgage company information to policies for new home buyers heading to the closing table. It’s convenient to roll your taxes and insurance all into one tidy monthly payment; I cut one check and pay three bills. Every year the bank sends me the letter giving me the breakdown of my mortgage payment and, like many, I take a look at the monthly payment amount and I’m done. But a recent client whose insurance I reviewed demonstrated just how much that convenience can actually cost.
This client owns a nice $400,000 home. It is well built, in a great neighborhood, structurally sound with a good roof. As an agent I love these kinds of homes because I know when I shop the risk through our carriers I’ll be able to provide my clients with coverage from a high quality company at a great price and there likely won’t be too many sticky underwriting questions to iron out. But insurance isn’t static. Carrier appetites will fluctuate, the way they evaluate risk changes, rates go up and down. So when I asked my client if she’d like me to review her insurance, she said, “Sure, I mean I haven’t thought about it in years anyways.”
When she actually dug up her current insurance policy and sent it to me, I was blown away. Her current policy was with a company we write with. It’s a decent company, not top-tier, but we do a good amount of business with them. The problem was, the premium was about 3 times what she would pay with a top-tier company. Now she had purchased this policy through a local independent agent and likely, when the policy was bound, it was probably the best premium available. But 15 years later my client was now, and had been for years, overpaying by about $4000 a year. How long had her rates been that high? Now she’s welcome to give that $4000 to whomever she chooses, but if she had been aware of the cost, do you think her insurance company would have been her first choice?
If you, like millions of other Americans, use an escrow account to pay for your home, don’t be in a rush to get to the closing table. An independent agent with access to multiple carriers is probably a good place to start because they are shopping your policy, not just selling you their product. However, not all independent agents are created equal. If you, like my client, place your business with an agent who studied at the Ron Popeill school of insurance where the motto is, “set it and forget it”, I can almost guarantee that you will quietly end up paying an enormous price.
If you are looking for a new agent, or if you really aren’t sure what you pay, gives us a call. Making sure you aren’t overpaying for insurance doesn’t mean you have to become an expert or even know how to track your rates, my clients generally aren’t, but they have found that making sure their agent is obsessed about the stuff that they’d rather not think about could be the difference between an extra vacation and sitting at home.
Give us a call for an absolutely no-obligation review of your insurance. You want the hardest working insurance agents in Florida working for you.
