General Insurance Tips

IS YOUR INSURANCE COMPANY FINANCIALLY SOUND?

When you buy insurance, ask about the financial strength of the company that your agent is recommending. The claims paying ability of an insurance company is often overlooked, but it is a very important consideration.  After all, it makes sense to purchase your insurance from a financially sound company that will be able to pay your claim, if one occurs. This is especially important with life insurance since you will want to stay with that company for a long time. The premium for most life insurance policies is primarily based on the age and physical condition of the applicant. If you need to change companies in the future, the increase in your age and any changes in your physical condition could result in a much higher premium.

A.M. Best Company and Standard & Poors evaluate the financial condition of virtually all insurance companies licensed in the U.S.  Standard & Poors has a claims paying ability rating that allows you to very easily determine a company's rating. Your agent should know the financial rating of the companies he or she represents.  You can also find reports on  these companies at your local library.


WAYS TO LOWER YOUR AUTO INSURANCE COSTS:

Consider higher deductibles
A deductible is the amount you pay for a covered loss before the insurance company begins to pay. By requesting higher deductibles on comprehensive and collision coverage you can lower your premium costs. For example, an increase in your deductibles from $200 to $500 could reduce your comprehensive and collision cost by 10% to 30%. You will have to decide if the lower premiums are worth the additional risk.

Often you will find that the higher deductible is almost equal to the decrease in premiums.

Consider dropping comprehensive coverage on older cars
Insurance policies will not pay more than the fair market value of your car. It may not be cost effective to buy comprehensive or collision coverages on older cars. Items to consider are the price of the coverage, the market value of the car, and your ability to replace the car if wrecked.

Buy a low profile car
Before you purchase a new or used car, check what it will cost to insure. Cars that are expensive to repair, or that are favorite targets for thieves, have much higher insurance costs. Sports cars in households with young drivers will send insurance premiums sky high, even if the young driver rarely or never drives the sports car.

Buy your auto and home policies from the same company
Most companies that sell homeowner and auto coverages offer multi-policy discounts to customers who purchase both policies from them.

Check into safety discounts
Most companies offer small discounts for airbags, anti lock brakes, security systems, and automatic seat belts. Some companies and agents automatically apply these discounts for you; others make you ask. If you do not see the discount indicated on your policy, call your agent to check.

Other discounts are available
Good student, defensive driving for seniors, and accident free discounts are available from many companies. The discounts are not large but any savings is a bonus.

Protect your driving record
Driving records are much the same as good credit. Insurance companies provide their best rates to drivers whose driving records are clean. Too many tickets, accidents, or comprehensive claims can result in an increase in premium or a non-renewal of coverage.

WAYS TO LOWER YOUR HOME INSURANCE COSTS

Try a higher deductible
Raising your deductible can save you premium dollars. For example, by increasing your deductible from $250 to $500, you could possibly save up to 12 percent. Raise it to $1,000 for savings up to 24%. Most companies offer deductibles up to $2500. You will have to decide if the lower premiums are worth the additional risk.

When selecting a home, factor in age and location.  A new home's electrical, heating and plumbing systems and overall structure are likely to be in better shape than those of an older home. Many companies offer a discount on homeowner coverage for newer homes; some restrict valuable replacement cost coverages on older homes. Your proximity to a fire station and fire hydrants is a major factor in homeowner premiums as the response time is quicker and the damage is typically less. Before buying, ask your agent to provide a premium estimate for you.

Beef up your home security
Insurance companies usually offer protective device discounts for smoke alarms, fire extinguishers, dead bolts, sprinkler systems, and monitored fire & burglar alarm systems. The premium savings for sprinklers systems and monitored alarm systems won't pay for the system, but if you already have them or feel you want them the premium savings can be substantial.

DO YOU HAVE A HOME-BASED BUSINESS?

If you do, give a call to the agency providing your homeowner insurance. Often, a homeowner policy alone will not cover the full extent of a business related loss, and in some cases, the homeowner may find that the policy provides no coverage at all.

Don't wait for a loss before checking your coverage. Here are some things to remember:

  • Homeowner policies are designed to insure homeowners. Many business activities and exposures are clearly never covered by homeowner policies. Prime among those them is business liability. A lawsuit filed against your business will not be covered by your homeowner policy.

  • Business items or products stored on your property probably would not be covered in full, nor would a computer system used exclusively for your home business. Other examples of items not covered would be contractors equipment, business inventory, and accounts receivables.

  • There are several different ways to insure your home-based business. There are endorsements available for many homeowner policies that add coverage for some limited business liability and property exposures. Depending on your type and size of business you may need a separate businessowner policy or even a commercial insurance policy.

  • Discuss any use of automobiles in your business with your insurance agent. Personal automobile policies exclude coverage for some business uses and for most commercial type vehicles.

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