Insurance protects you from financial loss in the event of a disaster or other hardship. By purchasing insurance policies, you can receive reimbursement for losses due to car accidents, property theft, natural disasters, medical expenses and loss of income due to disability or death.
General sources of insurance information include the American Council of Life Insurers, the Insurance Information Institute, the National Association of Insurance Commissioners and your state department of insurance.
When purchasing any type of insurance (home, life, auto, rental or others), you should always find out whether your state department of insurance (DOI) offers any information concerning insurance companies and rates. Check several sources for the best deal. Try getting quotes online, but be aware that many online services may provide prices for just a few companies. An independent insurance agent who works with several insurers in your area may be able to get you a better deal.
Make sure that the insurance company is licensed and covered by the state’s guaranty fund. This fund pays claims in case the company defaults. Your state DOI can provide this information.
Ask your insurance agent about discounts. You may be able to obtain a lower premium if you have safety features in your home, such as a fire extinguisher, dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing. Similarly, you may save on car insurance based on the safety features, the number of miles you drive, your age, your grades (if you are a student), and your driving record.
You might also be able to get discounts if you are a member of a civic or alumni association, or insure your vehicle and home with the same company. Consider increasing your deductible by a few hundred dollars. This can make a big difference in your premiums.
After the purchase
Make sure you receive a written policy. This tells you that the agent forwarded your premium to the insurance company. If you do not receive a policy within 60 days, contact your agent or the insurance company. Another caveat to that, make sure you know what your policy covers and that you understand what, if any responsibility you have in terms of paying for things that may not be covered. Working in the insurance industry, I see so many people who don’t understand their policy, and that’s okay. However, had those people taken the time to read and understand their policy, my job would be so much easier. If there is a coverage that you don’t understand, don’t hesitate to ask the agent before you pay for it. That will save you and your insurance company a headache in the long run.
Here is a list of different types of policies that you may need.
- Automobile insurance
- Disability insurance
- Health insurance
- Homeowners/renters insurance
- Life insurance
- Long-term care insurance
A few other types of insurance that you may encounter but are less popular than the ones listed above are:
Catastrophic Health Care Insurance. A health plan that only covers certain types of expensive care, such as hospitalizations.
College Tuition Insurance. Get a refund of college tuition if you must withdraw because of serious injury or illness.
Identity Theft Insurance. This type of insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports.
International Health Care Insurance. A policy that provides health coverage no matter where you are in the world. The policy term is flexible, so you can purchase it only for the time you will be out of the country.
Shared Services Insurance. Find out what insurance you need if you rent your home out or use your car to drive others for a fee.
Umbrella Insurance. A policy that supplements the insurance you already have for home, auto, and other personal property. Umbrella insurance can help cover costs that exceed the limits of other policies.
Remember, make sure you are informed of your rights as a consumer and that the insurance companies you do business with are reputable.