If one quote is a lot cheaper, the reason is almost always in one of five places. Premium is only one of the considerations.
Where quotes stop matching
Two commercial quotes can show the same limits, the same coverages by name, and prices that differ by thousands. That gap is not usually a bargain. It is a difference in what the policy promises, and it lives in five specific places. Check them in this order, and leave the premium until last.
1. The deductibles, including the ones expressed as a percentage
Start here, because it is where the largest surprises hide. A policy does not have one deductible. It has a standard deductible and then separate ones for specific causes of loss, and in Alberta the hail and water deductibles are the ones that matter.
A percentage deductible is calculated on the insured value rather than on the claim, which means it is a much larger number than it looks. Two percent sounds small until it is two percent of a building limit, applied to a roof claim. Convert every percentage deductible into dollars before you compare anything, because a cheaper premium with a percentage hail deductible can be the more expensive policy the first time it hails.
2. The valuation basis
Replacement cost and actual cash value are not the same promise, and the difference does not appear in the limit. Replacement cost pays what it costs to replace the property today. Actual cash value pays that figure less depreciation for age and wear.
On a twenty-year-old roof, that difference is most of the settlement. Check the basis on the building, on contents, and on equipment separately, because a policy can be replacement cost on one and actual cash value on another. If a quote is notably cheaper, this is one of the first places to look.
3. Coinsurance
Most commercial property policies require you to insure a building for at least a set percentage of its replacement value, commonly eighty, ninety or one hundred percent. Insure it for less and the insurer reduces every partial claim by the same proportion you fell short.
Two quotes can carry different coinsurance percentages, and the one with the higher requirement is stricter about the limit you must carry. A quote that is cheap because it assumes a lower building value has simply moved the problem into your next claim.
4. Sublimits
A sublimit is a smaller cap inside a larger limit, applying to one specific thing. A policy with a two-million-dollar property limit might cap sewer backup, flood, earthquake, property in transit, or property off premises at a fraction of that.
This is where a policy quietly stops covering the thing you assumed it covered. Compare the sublimits on the things that threaten your business, not the headline limit. For most Alberta businesses that means water, hail, and whatever is specific to the operation.
5. The exclusions
Two policies with identical limits can exclude completely different things, and the exclusions are the part nobody reads. This is why a declarations page is not enough to compare, and why a broker asking for your full policy is asking for the right document.
Read the exclusions against your actual operations. A contractor should be looking at what the policy says about faulty workmanship and completed operations. A restaurant should be looking at cooking equipment and spoilage. A professional services firm should be looking at what falls between the general liability policy and the errors and omissions policy, because that gap is where the uninsured claims live.
6. The premium
Once the five above are lined up, the premium comparison becomes meaningful, because you are finally comparing apples to apples. A quote that is still cheaper after all of that is genuinely cheaper, and worth taking seriously.
One last item that is not on the policy at all: who you will be dealing with. Certificates issued the same day, a person who answers the phone, and an advocate who knows your file at claim time are worth real money on the day you need them, and they do not appear anywhere on a quote comparison.
Want someone who gives you the whole picture?
Velocity Insurance will ensure you are fully informed when comparing quotes. Send us your current policy and see if you can do better on coverage or price.