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No one can predict the future, so it’s tough to know how much insurance coverage you really need. Ask yourself the following questions to balance your desire for comprehensive coverage with your need to keep your premiums under control:
Your daily routine and what you do in your free time can help determine what types of coverage you need. Here are some questions to think about:
Generally, the higher your deductible (the amount you have to pay before your insurance company will make payments on your claim), the lower your premium (the payment you make to maintain your insurance policy). Deductibles come in a variety of increments such as $250, $500, $1,000 or more. As an example, by reducing your deductible from $500 to $250, you would only pay $250 when a claim is accepted by the insurance company, but that lower deductible comes at the cost of higher premium. Balance what you can afford to pay with the deductible that makes sense for your budget.
Comparison shopping for insurance policies is important, but you may not want to choose an insurance provider based on price alone. Here are a few questions to guide you:
Is the insurer licensed in your state? Not every insurance company is licensed to operate in every state. This is especially important if you are moving out-of-state. Your state’s insurance department website can be a good resource.
Are you purchasing the right insurance that meets your needs? Most, but not all insurance companies offer a broad range of policies and features. Be sure to choose a company (and products) that meets your needs.
Is it financially solid? Four independent agencies – A.M. Best, Fitch, Moody’s and Standard & Poor’s – rate the financial strength of insurance companies. Consider a company’s rating from two or more agencies before judging whether to buy or keep a policy from that company.
Does it have a record of promptly and accurately processing claims? Your state’s insurance department website lists providers and customer rating information. Reviewing this information will help you select an insurance company that will respond to your needs while handling your claims in a fair and efficient manner.
Understanding the basics of insurance and knowing what to consider when choosing an insurance provider will help you protect yourself and your family – without breaking your budget.
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