Unfortunately, the home insurance industry works different from rewarding loyal customers. In fact, it operates on the principle of the boiling frog. If you place a frog in boiling water, it will leap out fast, but if you start it in cold water, the water will gradually heat up, and the frog will be cooked to death. This is how homeowner's insurance operates. Insurance providers will look at how much of a risk you are, and they will raise the rates if they do not think that you will shop around.
In particular, elderly homeowners have to exercise caution because home insurance providers love to cook them slowly. They might offer them what appears a great deal at first, but over time it goes up when you do not shop around. We were blown away by the story of a daughter who found out her father had been paying $957 a year for a two-bed bungalow. When she applied elsewhere as a new customer in his name, that same price dropped to $239 per year.
Over the years, her father paid over $5,121 more. Considering that he made only three claims in 58 years and one was for $29, it is not difficult to see that the only real burglary he ever suffered was from the insurance company.
In the car insurance industry, a lot of people are used to shopping around, but you have to apply the same principles for homeowners insurance. A lot of people are under the mistaken assumption that they have to keep their insurance with the same company because they bought the house under that policy. However, that is not true. A lot of insurance companies have been remarkable at exploiting that with raised prices. If you are a policyholder who accepts small increases every year without question, beware! You could end up paying a lot more than what is fair.
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