Did you know, when you buy homeowners, condo, or renters insurance from Progressive Insurance, through their Progressive Home Advantage program, it is not Progressive insuring your home? Progressive primarily insures automobiles & trucks, but acts as an agent, representing other insurance companies, when Progressive sells you property (homeowners, condo, renters) insurance, for you to receive the “bundling” discount you hear about in the Progressive advertisements. How good is the bundling discount? It can vary by state, home insurance company insuring you, and the type of coverage needed. When I called Progressive, the customer service representative told me only the home insurance policy would be discounted. Discounts for insuring your home and auto together are common with many insurance companies these days, and some companies discount both policies by as much as 20%. If you insure your car with Progressive, is bundling your property insurance with Progressive your best and least expensive option? If you bundle with State Farm or Allstate, unlike Progressive, both of those companies will be insuring your home & auto, possibly with much larger bundling discounts. This review will analyze the pros & cons of bundling your auto & property insurance together with Progressive, to help you decide if this is the best option for you.
The Progressive Home Insurance Advantage program
From the Progressive website: “Insurance through the Progressive Home Advantage program is underwritten by select companies that are not affiliates of Progressive and are solely responsible for claims, including Homesite Group Incorporated, IDS Property Casualty Co., and ASI Lloyds, and their affiliates. Certain Progressive companies are compensated as licensed agencies for the program. Product and discount availability varies by state.”
Let’s look at the pros and cons of buying your home insurance through Progressive:
Disadvantages to the Progressive Home Advantage program
1. Some of the companies partnered with Progressive are not very good.
The home insurance companies Progressive will offer you vary by state, property location (coastal properties, wild fire areas, no fire station within 5 miles), type of property (high value homes, older homes, unique homes, condominium, etc.) and risk profile (no prior insurance, recent claims, etc.) Here’s my rundown on the companies (as listed on the Progressive Web site) used by Progressive:
Homesite Insurance Group I believe Homesite to be the company Progressive uses to insure homes in most situations. Homesite does not sell through local agents, but sells its home insurance direct from the company, or through partners like Progressive. The problem with Homesite is the company has a reputation for terrible customer & claims service. In the latest 2013 JD Power home insurance satisfaction study, Homesite received the lowest rating of two power circles for overall customer satisfaction. Unfortunately, the sample size for Homesite was not large enough for its numerical score to be included in the JD Power study. However, the large number of home insurance customer complaints, as indicated by the complaint ratios calculated by the National Association of Insurance Commissioners, are a strong sign of inferior customer & claims service. Please see my 2013 Homesite Insurance review analyzing this complaint information, for more details.
IDS Property Casualty Insurance Company IDS, like Homesite, sells auto & home insurance direct from the company, not through agents, but has an arrangement with Progressive allowing the Progressive Insurance Agency to sell IDS home insurance. IDS home insurance is not rated by JD Power. IDS has a history of better-than-average home insurance complaint ratios (2009-2012), as you can read in my IDS Auto & Home Insurance review. However, if IDS has the home insurance coverage you need at a good price, you might be able to get a better deal by purchasing the home insurance direct from IDS (Ameriprise). IDS may have additional discounts and a better rate for your auto insurance, too. A lower rate may be particularly true if you are a Costco member, since Costco is a major marketing partner of IDS, and members qualify for an additional discount.
Assurant Insurance Assurant is probably best known to insurance professionals as a company providing “forced” home insurance coverage for lenders, whose customers do not have the necessary property insurance to meet the requirements of their home loan. However, Assurant, according to its website, also provides renters insurance and insurance for manufactured homes. It may be Progressive uses Assurant to sell warrantees or extended services contracts for home appliances.
All Risks, LTD All risks is a surplus lines insurance broker, not an insurance company, placing insurance for properties unable to obtain coverage, or the coverage they need, from the insurance companies admitted to conduct business in the state where their homes are located.
QBE Insurance Corporation QBE, like Assurant, is the other major player in the forced” home insurance coverage market for lenders, whose customers do not have the necessary property insurance to meet the requirements of their home loan. But also sells auto & home insurance to consumers, although its not a major company in the US home insurance market. Subsidiaries like Farmers Union Insurance & Unigard are a part of QBE.
American Strategic Insurance Corporation ASI offers home, condo, and renters insurance in close to half the US states, including states some major home insurance companies avoid, such as Florida, Louisiana, Texas, and New Jersey.
Occidental Fire and Casualty Company of North Carolina Occidental also specializes in hard-to-insure homes and properties, in Louisiana, New York, South Carolina and Alabama.
First American Property and Casualty Insurance Group First American Property and Casualty writes policies throughout the nation and specializes in Homeowners, Dwelling Fire, Condominium and Renters insurance. However, it is not a major company in the US home insurance market, and it has small customer base, compared to many other home insurance companies. Its home insurance business is most likely connected to its better-known title insurance company, First American Title Insurance Company.
Chubb & Sons Insurance Chubb is a well-known insurer of high value homes and affluent customers, with many independent insurance agencies representing the company.
Tower Group Tower, not to be confused with the Florida home insurer Tower Hill, insures homes and autos, and has a decent size share of the insurance market in New York. Be aware Tower Group International is having financial problems, and there is “substantial doubt about the company’s ability to continue as a going concern,” as noted in this article about Tower Group’s financial problems.
American Modern Insurance American Modern is a big player insuring properties and mobile homes not qualifying for insurance coverage with other companies. Many local insurance agents represent American Modern, to insure properties their primary company will not insure.
2. If Progressive acts as an agent selling home insurance, why not have a local agent representing the same company?
Chubb insurance has a great reputation for insuring high value homes. If Chubb is a good choice for you, why buy it from Progressive, when a local independent insurance agent can sell it to you at the same price, and provide personal service? Chubb will pay the same commission to Progressive, as it would to an independent insurance agent, but an independent insurance agency is more likely to provide better service & advice, than a Progressive customer service representative, working in an out-of-state call center.
3. If you have a home insurance claim, a Progressive call center representative is your agent, and isn’t likely to be much help to you.
If you buy your home insurance from Progressive, and have a claim, you will be advised to contact the company insuring your home to report the claim. Progressive will provide little, if any assistance to help you with your claim. When you buy from a local agent, it’s true most agents don’t get too involved in the claims settlement process, ether. It’s usually best for customers to work directly with the company claims representative assigned to their claim. However, agents can play an important role to resolve problems, when they occur. Without an agent, you are on your own, if you have a problem with your claim.
4. The bundling discounts are likely to be bigger with companies actually insuring both your autos & home.
With many insurance companies, you can save 20-30% on your home AND auto insurance, by insuring with the same company. You are likely to pay a lower price with companies insuring autos & homes, instead of companies like Progressive & GEICO, which do not insure homes, but sell other companies’ home insurance.
5. Agents matter when it comes to home insurance.
Owning a home is most people’s biggest investment, so insuring it properly should be of paramount importance. The best advice for insuring a house or condo comes from comparison shopping, using the expertise of several local agents, representing different companies. A Progressive call center representative, pressured to work quickly and sell insurance in many states, is not likely to have the specific knowledge or time to review policy exclusions and limitations, help you meet your unique needs, and avoid costly coverage gaps, if something happens to your property.
Advantages to the Progressive Home Advantage program
1. Convenience of being able to discuss your auto & home insurance in one call, with 24 hour access every day.
If you have your auto insurance direct from Progressive, it’s more convenient to use Progressive for your property insurance needs, too, rather than using a separate agent. Few agents attempt to provide 24 hours a day assistance to their customers. However, many insurance companies represented by agents, do provide 24 hour assistance. Most agents prefer you never contact the company directly, instead of them, for customer service, due to the many errors and customer service problems caused by insurance company call centers. For these same reasons, the convenience provided by buying from Progressive, may be complicated by the greater chance of poor service.
2. If you are having a hard time finding an insurance company or local agent with a good option to insure your home, Progressive may have better options for you.
If you have prior claims, live in certain higher risk areas (the coast, for example), or if you are doing extensive remodeling, you may have trouble finding an agent or company willing to insure you. Progressive represents some companies, like American Modern, offering specialty property insurance, and may be more willing to help you get coverage.
Progressive Home Insurance Advantage program — is it right for you?
I think most people would be wise not to buy home insurance direct from Progressive. Even if Progressive direct is the best choice for your auto insurance, you should shop your property insurance with other companies, and carefully decide what is the best mix of coverage, service, and price for you.
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