10 Tips for Buying Insurance

By Diane Tait

Image courtesy Pixabay

When you get right down to it, shopping for insurance isn’t a lot of fun.  That’s because there are so many companies and so many different types of insurance coverage to consider.  Did you know there were 5,965 insurance companies in the US alone in 2020?   You also have to deal with insurance jargon that sounds to most consumers like a foreign tongue.  Before you wind up buying the wrong coverage or start working with an insurer whose idea of customer service is an endless voicemail loop, I thought I’d take the time to teach you ten ways to get it right.

      1.      The first secret to simplifying insurance is to work with an independent agent.

Unlike captive agents who work with only one insurance carrier, independent agents work with many different insurance companies.  This means they’re able to compare premiums, and policies from several different carriers to help you find the best coverage at the best price.  They understand the language of insurance.  More importantly, they know how to help you assess how much coverage you really need.  Having a cheap policy and having the right policy are two different things. 

      2.      Find an agent who specializes in the type of insurance you seek.  Just as there is a lot of specialization in the medical profession, so too is there in the insurance industry.  Some agents specialize in homeowner’s policies, while others specialize in auto coverage.  If you’re looking to insure a sailboat, a speedboat or a yacht, find an agent who has experience insuring boats.  Likewise, if you just put down a deposit on a motorhome, find an agent who has years of experience dealing with RV insurance.

      3.      Cheaper isn’t always better.  While consumers always want the best deal when they purchase a product, they also need to understand they only get what they pay for.  While cut-rate insurance carriers exist, what you may soon find is that they may also offer cut-rate customer service or claims processing.  You could also come to find that cheap coverage leaves you woefully underinsured when you do file a claim.  Before you sign up with an insurance company you never heard of to get a discounted rate, make sure you check them out online. 

Image courtesy Pixabay

      4.      Want to save money?  Ask about discounts.  Believe it or not, there are ways to save money without watering down your coverage.  Most insurance companies offer discounts to individuals and families who reach certain milestones or represent a reduced risk.  Homeowners can get a discount for having or installing a monitored burglar or fire alarm, or for other home improvements like installing new wiring or plumbing or replacing that old roof.  Drivers can get discounts for being a safe driver or driving fewer miles.  There are also discounts for having multiple policies under the same carrier.  The only way to take advantage of discounts is to discuss them with your agent.

      5.      Reevaluate your coverage every year.  If it’s been more than a year since you last spoke to your agent about your insurance coverage, you could be doing yourself a disservice.  That’s because in the past year, your circumstances could have changed, or coverage options could have changed.  Instead of blindly renewing your policies every year, if you want to make sure you have the best coverage at the best price, call your agent and have them input your particulars into the computer to see if you qualify for additional discounts or need to consider additional coverage.  Fifteen short  minutes on the phone could save you big in the coming months.

      6.      If you make a major change, let your insurance agent know about it.  Any time you move or move up you need to call your agent.  A change of address can affect your homeowner’s and auto insurance coverage.  A promotion could put you in a situation where you have too little liability coverage.  A new addition to your home may leave you underinsured when that next named storm hits your area.  A new swimming pool could leave you treading water if a friend, relative, or neighbor were to injure themselves on or near it.

      7.      Tell your agent the whole truth.  Whether you’re looking to save money on your auto policy or your homeowner’s insurance, you need to tell the whole truth to your agent.  If not, you could come to find that a claim can be denied by your insurance carrier.  That’s right, if you don’t come clean about the condition of your property, your driving record, or that pit bull you own, your claim could be denied.  It’s not worth saving a few dollars now only to lose thousands later.

      8.      Never assume you’re covered. There are many people who lost everything simply because they assumed they were covered by an insurance policy.  I can’t tell you how many families were left homeless in Texas after Hurricane Harvey simply because they weren’t located in a flood zone.  Since Florida is the hurricane capital of the United States, I urge all homeowners who live there to talk to their agent about whether adding flood insurance is advisable.  The same goes for making sure all the structures on your property are be covered for damage caused by wind or weather. 

      9.      Ask your agent if that’s the best he or she can do. Just as you shouldn’t assume that everything you own is covered by a policy, you shouldn’t assume that an agent is giving you the absolute best deal on a policy unless you ask first.  You’d be surprised how a tweak or two can make a big difference in your premiums.  So too can revealing additional information to your agent.  For instance, if you drive less than 5,000 miles per year or are willing to pay your premiums every 6-months instead of monthly, these revelations can save you money.

      10.  Your agent doesn’t have the last say.  You do.  While any insurance agent will try to give you the best deal possible, if you feel that the price is excessive or the coverage is inadequate, you can always contact another agency to get a second opinion.  Just as you’d be wise to get a second opinion if a doctor advised surgery, there’s nothing wrong with getting more than one quote on the policies you carry.  After all, it’s your money.

Diane Tait owns and operates A&B Insurance.  To find out more about how you can save money on insurance, go to her site or fill out the form at right.