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  • Paul Fulmer

The INSURANCE HAMBURGER

Have you ever given a thought to how insurance is priced, or why it varies so much from company to company? Identical twins, living in identical houses, across the street from each other, driving identical cars, with no accidents or speeding tickets could be paying extremely different insurance rates. Insurance that is good for your friends and family, may not be good for you. The main factor in insurance is YOU. That is why it is important for you to shop your insurance with an independent insurance agent like us!

Back to pricing, insurance is regulated by the state through the department of insurance. [ Why is insurance so highly regulated? Because the state wants to make sure the insurance companies stay solvent and are around to pay the claims.] Think of it this way, insurance is kind of like a hamburger. Hamburger is food, its regulated by the FDA and the state and local health departments on how it’s handled and processed. There are thousands of choices you can make in picking a hamburger. You can go to a butcher and buy the meat and cook it yourself. You could buy a burger already made from hundreds of different places. You decide the type of meat (chuck, ground, tofu, vegan) how its cooked, gas, electric, charcoal, wood, broiled, fried, you can even decide what kind of bun, sauce, cheese, lettuce, salt, spices, and bacon to put, or not put on it. Now you have the general idea. The state regulates the basic insurance language that every policy must have, after that, just like the hamburger, each company adds different features. The main feature that makes every insurance policy different is YOU. Regulations make it so insurance can not discriminate! Insurance companies must file their rates with the state before they sell insurance. They can refile their rates up or down. Companies look at your accident loss history, your life and compare you to other people, and they rank you statistically. That’s what makes some people better risks than others. The Insurance company is not singling you out or trying to cheat you, they are placing you into their model to see how you rate against everybody else. Each company weighs each feature differently. Some companies charge more for accidents, or insurance score (credit), age, experience, type of car, zip code you live in or … BACON - your health and style of living choices.

So, what have we learned besides being hungry for a hamburger? Every person and every insurance company is evaluated differently. That is why it is important to get as many quotes as you can and see what company you match the best! If you don't have time to get multiple quotes, let us do it for you! It’s what we do!


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