Purchasing any kind of insurance policy can be a stressful and overwhelming experience. There are so many companies to choose from, so many policies, and countless options to consider. Unlike a cup of coffee or a new pair of jeans, we don’t deal with insurance enough to know what the cost of insurance should be, making the whole process seem scarier.
The good news is that as long as you go into it knowing the right questions to ask and what to look for in a policy, the whole process should go smoothly.
Here are 5 tips to help you find the right insurance
- Assess the Costs Involved
- Who Are You Working With?
- Mind the Gap
- Check Claim Settlement Ratio
- Read the Fine Print
1. Assess the Costs Involved
It’s no secret that price is one of the first things we think of when it comes to purchasing insurance. While price is a very important consideration, it’s also directly related to your coverage needs and the financial strength of the company.
Depending on the insurance company you choose and what’s included in your coverage, there could be quite a few costs that you should be aware of. In addition to the regular insurance premium, you’ll also need to think about any riders you add to the policy and possible administrative or management fees that the insurance company appends onto the final bill.
2. Who Are You Working With?
Knowing exactly who is on the other end of the phone or computer screen is important when choosing insurance. Are you researching independently, or working with a broker or agent?
If you’re going it alone, you’ll need to be organized to sort through the data to find the right policy and the right amount of coverage. If you decide to go with a professional service, you can look to either an agent or broker.
Insurance agents are usually hired by one or more insurance companies to sell policies. They’ll be able to rapidly compare policies for you, but they may be limited to the companies that hired them. Brokers, on the other hand, work directly for you, and a good one should be able to evaluate all of your needs and research the perfect policy for you.
Can the Company Pay Its Bills?
With massive insurance companies like State Farm or Geico, chances are, you know the answer to that question. There are a lot of benefits to working with a large company.
Working with a smaller insurance company can sometimes offer its own advantages as well. You just need to be aware, however, that if they do not have enough clients, they may not be able to pay out on expensive claims.
3. Mind the Gap
One of the most important questions you can ask when choosing an insurance provider is, “What isn’t covered?”. When making a decision on insurance you need to answer this question thoroughly before choosing. You may have what looks like the best coverage in the world, but if it falls outside the policy guidelines you may find out that it’s harder to make a claim — or, in fact, receive a settlement at all.
Assess Your Needs: Don’t Go Overboard
Before you can find out what is or is not covered in an insurance policy, you should look at your individual needs and exactly what you want to insure. An extensive policy that covers everything (including the kitchen sink) might seem like a good idea, but if any of the coverage items are extraneous or irrelevant to your lifestyle, then you’re going to end up paying more than you should for things you don’t need.
General insurance policies like renter’s or homeowner’s insurance cover a wide variety of items and disasters, but they’re usually not comprehensive. Knowing what’s covered in your policies and what’s not is the first step to finding the gaps and potential liability you might face if the worst happens.
While it’s important not to go overboard with an insurance policy, you should also avoid under-insuring yourself as well. Assessing your needs can help you craft a customized policy that covers exactly what you need. You can also include niche insurance for high-ticket items like brass band insurance that might end up being a lifesaver for groups or your most prized possessions.
4. Check the Claim Settlement Ratio
The purpose of insurance is to protect yourself and your property against any loss or hassle in case the worst happens. If you pay your premium consistently and on time each month, you would hope that the insurance company would take care of your claims in a timely manner. Unfortunately, this is not always how it works.
A good indicator of the service you’ll receive in case of a claim is the company’s claim-to-settlement ratio. With a bit of research, you should be able to find this number, which should be expressed as a percentage. The higher the percentage, the more reliable the insurer.
Ease of Doing Business
In addition to discovering how often the company actually pays out claims, you should look at how easy it is to work with them in general. Some good indicators are things like whether or not they have 24/7 customer service, online bill pay, online claims reporting, how they deal with billing questions, and what the process is for making any policy changes.
If you find the process smooth and the company eminently reachable, you’ve probably found a winner!
5. Read the Fine Print
Shop smart when looking for insurance and make sure to read all of the small print on any policy paperwork a company gives you to look at. There can be hidden fees, stipulations, and coverage disclaimers that may present unhappy surprises down the road if you’re caught unawares.
When shopping around for insurance, make sure to check for discounts depending on your situation in order to get the best deal for your needs. With a bit of research and preparation, finding the right insurance doesn’t have to be a challenge at all. Insurance companies are there to serve your needs and as long as you’re informed, you can be the best advocate for yourself and get the perfect coverage.