Welcome, readers! This is Abri News, where you’ll find helpful policy information to assist you in finding the best coverage for your needs. What should an insurance provider offer? Competitive rates? Peace of mind? Stellar customer service? Well, ideally, a quality provider should offer all three. Companies are often compared using solely their quotes. This is understandable. There’s no point shopping around in a price range you cannot afford. However, we would like to offer you alternative means for evaluating potential providers. As well, we want to elucidate the difference between “good coverage” and “bad coverage” when it comes to your insurance needs.
What is “bad coverage”?
Bad coverage doesn’t have a one-size-fits-all definition. Simply put, bad coverage is coverage which doesn’t meet your specific needs. These are plans which do not meet your minimum need for coverage, plans which exceed your maximum need for coverage, plans which include contract language specifically for the purpose of allowing the insurance company to avoid paying a claim, plans with certain policy implications which require unreasonable action to be performed by the policyholder for a claim to be paid, and any other bad faith practices.
You aren’t able to assess whether these aspects of a plan are present just by seeing the quote. A low rate may come along with a bunch of things you definitely don’t want, which is why looking into your policy provider is imperative.
How to compare insurance companies?
There are a number of ways to compare insurance companies. First and foremost, there’s specialization.
Specialization
Certain insurance companies specialize in particular types of clients. If you’re looking for coverage for your family, you might want to seek out a company which appeals specifically to families. Likewise, if you’re an older driver or a driver with a tarnished driving record, there are companies who are willing to work with you and will not charge exorbitant fees.
Rates
Of course, the tried-and-true method for determining which insurance company is right for you is by comparing quotes. This will certainly help to narrow down the competition, as quotes which are out of your price range can immediately be crossed off of the list. Again, don’t allow this factor alone to determine your choice of provider for you.
Determine your coverage limit before comparing quotes and make sure you enter the same parameters on each insurance site.
A pertinent aspect of comparing quotes involves searching for a company’s current discounts. Discounts from having a good driving record, a good health history, or bundling claims can offset the price of a high quote. Do the math or use an online calculator to assess whether the saving make a difference in the long run.
Complaint Ratios and Financial Ratings
You can check a company’s complaint records by visiting the National Association of Insurance Commissioners’ (NAIC) website. You can also check this information by visiting your state’s insurance department website. A high volume of complaints can mean the insurance company lacks good customer service or they have a habit of failing to pay out claims. The complaint ratio is the company’s market share of closed complaints compared to its share of premiums. The company’s ratio should not exceed the national median.
Complaints usually fall into three categories: unsatisfactory settlements, denials of claims, and claim handling delays. When considering a particularly appealing low quote, weigh the benefit of a lower monthly payment against the potentiality of running into problems in your moment of need.
What to Look For
Now, you’re looking past the quote. Great! Let’s go through some different types of insurance and outline what you should be looking for in terms of coverage.
Homeowners’ Insurance
Homeowner’s insurance exists in case of the destruction of your home and theft of the property therein. There are three levels of coverage:
- Replacement Cost
- This is the amount of money a business must spend to replace an essential asset with the same asset or an asset of higher value.
- Actual Cash Value
- To arrive at this value, insurers use the cost of replacing a property and subtract the depreciation of the damaged property at the time it was lost. For example, Company ABC bought a computer for one-thousand dollars six years ago and the cost to replace the computer now is fifteen-hundred dollars. The value of the old computer has depreciated by seven-hundred dollars. Therefore, the actual cash value would be eight-hundred dollars.
- Extended Replacement Cost
- This cost is in addition to the replacement cost and covers any expenses which are unexpected and out of the policyholder’s control.
Take these three forms of coverage into account when choosing your plan. Homeowners’ insurance is highly customizable. The coverage should cover the interior and exterior of your house. In the event of several types of natural disasters or vandalism, you should be able to have your house fixed or even rebuilt. If you own extremely expensive possessions (i.e. fine jewelry, fine art, antiques) you may want to take out a separate policy for each item. The minimum amount of coverage for most homeowners’ policies is $100,000, but it’ll be safer to be insured at least up to $300,000.
Life Insurance
Not everyone needs life insurance. If you have a family or financial situation which could be put into flux by your death, obtaining a suitable life insurance policy will relieve a modicum of stress about how those you love will continue on after you’re gone. If you’re older and in need of life insurance, a little extra research will yield a company who is willing to work with you, although you may pay a higher premium. Life insurance should cover any current debts you have—like mortgages and student loans where someone cosigned for you—and be sizable enough to fill the gap where your income used to reside.
There are two different types of life insurance:
- Whole
- This is a form of permanent life insurance. You’ll have this policy as long as you’re alive and the premiums are being met monthly. With some of these policies, you can invest your premiums into the market.
- Term
- Term policies are, thus, only for a set time period. For example, depending on your age, twenty or thirty years. These policies often carry cheaper premiums.
You might opt for additional riders such as disability or long-term care insurance, as well. The amount of life insurance coverage depends on your particular situation and the quote may depend on a medical exam. To reach a suitable figure, add together your existing debt plus interest, then estimate any funeral expenses and potential for lost income. The number you come up with will be a ballpark estimation.
Health Insurance
We all do however, conceivably, need health insurance. There are numerous options on the market, all varying in terms of coverage and price point. October and November are the months when most Americans switch plans, so now is a good time to start shopping around if you’re looking to switch plans later in the year. Low premiums can come alongside higher deductibles and smaller networks, so be diligent about your research. Check for out-of-pocket expenses (which can be factored into the overall quote for a better assessment of actual price) and copays. If you need certain prescriptions, make sure those are covered by your provider. If so, make sure you don’t need to jump through any unreasonable medical hoops in order to get ahold of the medication you know you need. If you have a preferred doctor, make sure the provider won’t deny your claim just because they’re out-of-network. Find a provider who is willing to work with you and who offers benefits relevant to your needs (e.x. Free gym membership, online portals, virtual doctor’s visits, free counseling).
Car Insurance
States require drivers to purchase specific amounts of liability coverage. Liability coverage is actually two-fold. It’s bodily injury liability coverage and damage-to-property coverage. These protect you in an at-fault accident. In some states, drivers are also required to have personal injury protection coverage (PIP), but if you have good health insurance, it’s not technically necessary. There’s also collision insurance, which covers all damage to your car, including non-collisions. You’ll need to assess, in each instance, which forms of coverage are mandatory in your state and which you’re in need of. The auto insurer might try to sell you on optional coverage. Hold off on purchasing protection unless you truly believe you’ll have a need for it in the future.
Liability coverage typically falls between $100,000 per person.
If you still need help finding the right insurance policy for your needs, reach out to us! Everyone here at Abri Insurance is eager to assist you in your search for the best coverage. Come back here to read the latest news and discover more about how to make the insurance industry work for you! Thanks for reading! Until next time!