Buying Insurance in Today's World
Insurance: Financial protection against personal loss has become a must for nearly everyone in today’s world. States require automobile insurance protection for those licensed to drive on their highways in case the driver of a vehicle damages the property and person of other drivers, pedestrians, businesses, or residents. Lenders typically require insurance policies with specified levels of coverage in order to protect their interest in the automobiles, homes, and other assets that their borrowers hold and use.
And, with the rising cost of medical care and the increasing longevity of people with access to competent medical aid, there is a growing need for doctors and hospitalization insurance coverage. Moreover, the demand for disability insurance protection when one can no longer work and for long-term care when we no longer can adequately take care of ourselves is on the rise. All over the world people are living longer and becoming more aware of the benefits of quality medical care and adequate health insurance.
Unfortunately, many forms of insurance are expensive and those costs have been increasing, particularly in the areas of auto liability coverage and medical care. To protect our budgets we need to seek out practical ways for saving money on insurance services.
Admittedly, while insurance services are intangible and sometimes hard to understand, many of us cannot live well without good insurance protection. Insurance agents and financial planners have developed a number of practical suggestions to help us bring insurance protection within our financial reach.
Among the most highly recommended money-saving steps when you are purchasing insurance are the following:
Shop around for a better deal.
In many states insurance is a highly competitive industry. Your local agent or you personally, searching on your own over the Internet or by checking out the ads on television, radio, and in the newspapers, often can find cheaper coverage or more generous insurance protection for the price you pay. Among the web sites that may be helpful to the insurance shopper are:
Prepare yourself to handle a higher deductible before your insurance kicks in.
Most accidents and other claims are small. If you have adequate emergency savings, you may be able to pay off those claims yourself and save a bundle on insurance expenses. For example, instead of getting insurance policies with a $100 or $250 deductible, ask about a $500 or $1000 deductible policy and see how significant the savings can be. You need to make sure, of course, that you have the money to cover what your insurance won’t pay.
See if you can get group discounts by buying insurance through your employer, church, club or other social organization.
A portion of the savings an insurance company gets by selling insurance protection in large blocks can be passed on to you, the customer. Moreover, as you get older, you may qualify for special discounts as a senior citizen.
Find out what you can do to lower your risk exposure and qualify for insurance savings.
For example, teenage drivers with high grades or after taking a drivers’ education course often qualify for significantly lower insurance premiums. The same may be true of adult drivers who take a defensive driving class. Many auto insurers give you substantial breaks on auto insurance if you drive fewer miles, buy a car with anti-lock brakes, have automatic seat belt mechanisms installed, or purchase an auto with good air bag systems. When purchasing your next vehicle, find out if it has a high theft rate (such as by contacting the Insurance Institute for Highway Safety in Arlington, Virginia or via the world wide web at www.hwysafety.org) and seek out, instead, a less tempting set of wheels.
You also may save if you insure more than one vehicle with the same company, are a senior citizen, have had no accidents in several years, or your vehicle has a quality alarm system. If you own a home, equip it with fire extinguishers, smoke alarms, and a safer, fire-resistant roof, and this may lower your homeowners’ insurance bill substantially.
Ask if package policies are available which combine different coverages such as homeowners' protection, automobile insurance and personal liability protection.
These combination policies are often cheaper than buying each form of risk protection separately.
Make sure you know what is or isn't at risk and insure accordingly.
For example, if you have an old car, fully paid off and likely to be replaced in the near term, you may want to limit the auto insurance you buy mainly to liability coverage rather than purchase substantial collision coverage in order to have the car’s body repaired. Similarly, when figuring the cost of your homeowner’s insurance remember that the estimated value of your home may include the land upon which your residence sits. If you are seeking fire protection for your house, you do not need to obtain coverage for the land, but only the structures that are sitting on your land.
Be alert to possible rip-offs, contacting your state insurance commission or the insurance regulator in the insurance company's home state if you believe you have received a raw deal.
Most insurance agents and companies want you to be satisfied with your coverage and the services you receive. Go first with your complaint to the agent or company that sold you the policy. If that doesn’t help, let the state insurance commission know.