Just bought a new car? In most states, you can't drive it off the lot without insurance. Finally able to purchase a home or condo? As your most valuable asset, you want to insure it, even if your mortgage lender does not require it.
Even if you already have auto insurance, home insurance, health insurance, and life insurance, you should review your policies periodically to be sure you have the right coverage for your circumstances at the best possible price. Here's how to conduct a review or shop for a new policy:
1. Assess Your Needs
Whether purchasing for the first time or reviewing an existing policy, the first question to explore is how much coverage is best for you. How much insurance you choose to protect your assets and your loved ones is ultimately based on how much risk you are comfortable with on balance with what you can afford.
To get the spend number that is right for you when you buy insurance, look at the following variables:
? Insurance company ratings
2. Understand the Ratings
Insurance companies have report card type grades that give you a good idea about their financial health and their ability to pay claims. The type, and the very insurance company, you choose is also a reflection of your risk tolerance and your pocketbook. Purchasing from less than an A++ provider can save you a considerable amount on premiums. Sometimes, due to a pre-existing medical condition, a driving record, a hobby, or a less than stellar credit rating, you might not be eligible for insurance through the highest graded providers. For more information about ratings, visit the websites of J.D. Power and Associates, A.M. Best, and Standard and Poor's.
3. Customer Testimonials and Consumer Reports
Before you buy a grill or a new brand of cookies, you might ask someone you see using the product how they like it. Likewise, inquire among your network to learn what they have to say about their insurance providers. Although anecdotal information can not reliably tell you how strong a company is financially, it does give you insight into a company's customer service.
4. Online Quotes
Once you have a good idea about your risk tolerance, you are ready to get online quotes. After you fill out an online form, you receive emails and phone calls from companies that are interested in your business. In some cases you are contacted by agents of the insurance company. In other cases, you are contacted by a broker, someone who represents lots of different insurance companies. In addition to getting at least ballpark estimates, you can also get first hand customer service experience, valuable all by itself.
5. Read the Policy
When you are ready to buy, be sure to take time to read your policy all the way through before signing. A policy is a contract that spells out the insurer's obligations. These obligations are based on the information you provided on your application, so be sure to fully disclose, otherwise you might give the insurance company reasons to deny your claim should you ever have one.
The couple of hours you spend tending your policies can pay you back in savings and peace of mind all year, especially if you have to file a claim.
Lorraine Watkins is a communications professional who has managed marketing and public relations for Parasoft, Symantec, Candle and several other high tech companies. Her previous experience includes managing the Baskin Robbins franchisee training program and teaching college level English. Lorraine holds an MA in English from Cal State East Bay.
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