Insurance is a product that you purchase to protect yourself from financial disasters. Your needs and protection will likely change from time to time. Therefore, it is important to understand the insurance policies you have and whether or not the new coverage is still right for you. If you are considering buying insurance, here are some basic shopping tips to remember.
Get multiple quotes on your coverage.
Many agents represent multiple carriers and can easily present you with a comparison of terms and coverage. Some agents represent only one carrier. This does not mean that they won’t give you the best quote, but you owe it to yourself to see what is available in the market. Remember, it will cost you nothing to get additional quotes.
Never be pressured into a decision.
If you are uncomfortable with the answers provided by an agent, or you do not believe the right amount of coverage is being offered, see an alternate opinion. Don’t hurry your decision because an agent is pressing you to make a decision, and don’t leave yourself uninsured while deciding either.
Compare before you switch.
Before switching policies, compare the benefits, premiums, limitations and exclusions. They make the difference between true insurance savings and a mistake. A competent agent will have the ability to lay out the differences for you in plain English without hesitation. If the professional assisting you cannot accurately and easily show you the differences, find another one.
Learn about your agent and company.
You can view a company profile that includes information about the company’s financial status and history. Every state has a state insurance department which governs the actions of the professional assisting you. Don’t be afraid to contact them for the history of any agency, company, agent, broker or brokerage you are considering. Remember, this is their job.
If you don’t understand aspects of the policy ask for
a “plain English” definition.
Ask questions and take notes when talking to your agent. There is nothing wrong with asking questions that assist you in better understanding what you are about to pay good money for. A true professional will shine when questions about his or her product are brought to bear…and you will know immediately if you have the right person assisting you. Don’t be afraid to say no.
Answer all questions on the application accurately.
If you omit or falsify information on the application, it could cause the company to deny your claims or cancel your policy. Even if supply knowingly “incorrect information” on your application that you feel is minimal or unimportant, you could be risking a great deal…such as the denial of an important claim or the cancellation of your policy. If your policy is cancelled due to falsification of information, you may have a very difficult time finding a carrier who will cover you. Insurance companies have investigative departments and they aren’t stupid.
Read what you are asked to sign.
Remember…never sign a blank application form. Repeat…never sign a blank application form.
Don’t Pay Cash if you can avoid it.
It’s always preferable to make checks payable only to the insurance company or the insurance agency and not an agent. Never pay cash to an individual agent without receiving a receipt bearing his or her signature. Always insist upon a receipt if you pay in cash.
Short Rate versus Pro-rata.
Insurance requirements vary from state to state as do your rights. Be sure to ask about penalties for canceling a policy before the expiration for there are two types of cancellations – short rate and pro-rata. Short rate means that you are penalized for canceling early in the form of a smaller percentage being returned than if you divided the premium by the number of days you were insured. Pro-rata divides the premium by the number of days you were covered. The difference may be nominal or significant. But, you should know your rights and what the impact will be on you.