8 Useful Insurance Shopping Tips

Insurance is a product you purchase to protect yourself from financial disasters, and your needs for protection can change over time. It's important to understand the insurance policies you have and decide if those coverages are still right for you. If you're considering buying insurance, here are some shopping tips to remember.

Never be pressured into a decision. If you are uncomfortable with the answers provided or do not believe the right amount of coverage is being offered, seek a second opinion, but never leave yourself uninsured to do it. Again, never leave yourself uninsured.

Compare carefully before you switch policies. Before switching policies, compare benefits, premiums, limitations and exclusions carefully. They make the difference between true insurance savings and a mistake. A competent agent, broker or advisor will have the ability to lay out the differences for you in plain english without hesitation. If the professional assisting you cannot show you accurately the differences, find another one.

Find out 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. Do not be afraid to contact them for the history of any agency, company, agent, broker or brokerage you are considering.

If you do not understand an explanation, a coverage, policy provision or something as simple as property damage, ask the agent, broker or professional to clarify and put the words in plain english! Ask questions and take notes when talking to an agent. There is nothing wrong with asking questions that assist you in better understanding what you are laying out hundreds or thousands of dollars for. A true professional will shine when questions about his/her product are brought to bear and you will know immediately if you have the right person assisting you. Never be afraid to say no.

Answer all questions on the application accurately. Omitting or falsifying information could cause the company to deny your claims or cancel your policy. Here's a great claim I witnessed first-hand. A client lived in Brooklyn, but his father had a summer home in the mountains of upstate NY. The difference in premium between these two areas is staggering. Perhaps $3000 in Brooklyn and $650 upstate. He decided to state that all of his vehicles were kept at the upstate address while in fact, he didn't live there. Guess what happened? His brand new minivan was stolen and stripped to the frame. He made the claim that he was visiting Brooklyn, but companies aren't that dumb. They investigated and found it was all a lie, then refunded the premium he paid to date and denied the claim. He had just leased the car and was forced to pay for all of the parts himself. Talk about an expensive lesson. The moral - if you cannot afford the insurance, do not buy the car. Above all, do not lie about where it is kept!

Read what you are asked to sign. Never sign a blank application form - EVER!

Do not pay cash or make a check out to an individual agent without receiving a receipt bearing his or her signature. Make checks payable only to the insurance company or insurance agency. Insist upon a receipt when paying cash that is signed.

Know your rights. Insurance requirements vary from state to state as do your rights. Be sure to ask about penalties for cancelling 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 cancelling early in the form of a smaller percentage being returned that if you divided the premium by the number of days you were insured. Pro-rata divides the premium- let's say $1000 per year by the number of days you were covered- let's say 36 and refunds the difference of $901.37. A short rate cancellation might refund $865 instead.

-Source: 4freequotes.com-

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