Homeowner’s Insurance and the Hamburger Paradox

Hamburger_Homeowner's

What do hamburgers and homeowner’s insurance policies have in common? 

Okay let me set the stage for you. It’s Wednesday night and both kids have basketball practice. There is no chance you can cook dinner and make it to practice on time. So to the drive thru window we go! You place your order, pay at the first window and grab your food at the second.

Now you’ve been burned before. You’ve pulled away from the restaurant only to find out you’re one burger short. Never again! So before you even leave the parking lot you hand the bag to the passenger seat with instructions to “make sure it’s all there”.

It makes sense.  The stakes are pretty low, but you want to make sure you get what you paid for. There’s an immediate negative effect felt if your order is wrong. And that’s why you pop open the bag before you leave the parking lot.

Now let’s raise the stakes. 

Let’s apply that same theory to your homeowner’s insurance policy. Do you check to make sure you’re getting what you paid for? I’m betting that’s a no. No one reads their policy even though you should. And that’s because you don’t need it right now. You buy homeowners insurance so that maybe, some day in the distant future you might use it… maybe. Your home policy is more of an abstract promise than a tangible product.

I think we can all agree that your home insurance policy is much more important than your missing burger. It’s easy to count how many sandwiches are in the bag, but knowing what’s in a homeowner’s policy- now that’s a tall order.

So how can the average consumer evaluate what is actually covered by their homeowner’s policy?

  • Don’t go it alone. The internet is a magical place where you can buy anything you need. Or don’t need. But you should not be buying something as important and complicated as a homeowner’s insurance policy over the internet. You need a human person who has your best interest in mind. Just don’t do it!
  • Do your homework. Fun stuff right?  Here’s a link that will give you some information in a nice readable format.  You don’t have to be an expert, but you should have a basic understanding of what you’re buying.  You need to know enough to understand if the person you do talk to has your best interest in mind.
  • Ask the right questions.  Okay this one may be a little tricky.  What if your insurance agent provided you with a comparison against your current coverage and a list of other coverages you might want to consider? (by the way, that’s exactly what we do).

So getting back to the original question now, what do hamburgers and homeowner’s policies have in common? I would say, not much. One key similarity is you want to know what you’re getting.

I’ll leave you with this closing thought. People often call us and ask for the cheapest home insurance policy they can get. I would equate that to walking into a fast food joint and asking for a discount on the one that fell on the floor six months ago. Bon appetite!!