Everybody loves a bargain, but in the insurance industry, it’s not going to happen. There’s no such thing as a loss leader to get customers in the door or a hookup from a friend who can get you the wholesale price.This is because the insurance industry is heavily regulated by state governments. State insurance commissions serve four primary oversight functions, ensuring that:[caption id="attachment_466" align="alignnone" width="1000"]

Business finance concept background of hundred dollars bank notes bills of new 2013 year edition[/caption]

• Rates are fair and equitable for all consumers
• Insurance companies are solvent and pay claims as promised
• Brokers and agents are licensed
• Policies fill their intended needs—that there are no gaps or surprises buried in the fine print

In other words, you can’t legally be sold a policy that says if a tree falls on your house, it must have exactly 17 leaves or you won’t be covered…by someone who doesn’t know what a premium is…that is six times more expensive than your neighbor’s policy…just because the agent doesn’t like your hairstyle.Insurance companies must use actuarial data to justify their rates and get approval from each state’s commission before those rates go into effect. So how is it that the cost can vary so much for the same coverage from different companies?Insurance companies are ninjas when it comes to data slicing. In the case of auto insurance, your premium generally includes all driving-age household members and consists of a base rate that is adjusted by many factors:

• Age
• Gender
• Marital status
• Driving pattern
• Claims history
• Location
• Credit history
• Make, model and year of your vehicle(s)

There are a lot of ways insurers can use that data to make a case for their proposed rates. You’ll generally find the cheapest with a company that understands your risk. For instance, some specialize in non-standard auto insurance for individuals with bad credit, a DUI history or other factors that make them high-risk. Because the insurer understands these risks really well, they know how to price those policies properly.One of Kelly Klee's niches is insuring expensive homes. We only work with insurance companies that understand how to do a thorough and accurate replacement-cost estimate on high-end finishes and custom features. We’ll also be sure that your home’s contents are properly covered, including collectibles. By understanding our clientele, we can give advice targeted to your unique situation, making sure you’re covered where you should be and not paying for coverage that you don’t need.You’re never going to find a sale on insurance because rates are not decided arbitrarily. This is why working with an agent who fully understands your needs will usually uncover the lowest premiums and best secure your future.

"