Buying Insurance Overview
Whether you've just started looking into buying insurance, or you own multiple policies already, you've probably noticed that there’s no shortage of eager insurance agents waiting to sell you all sorts of insurance products. But how, when, and where you can buy insurance varies somewhat depending on what type of insurance you're looking for. Read on to learn more about the first steps toward buying insurance.
Buying insurance: Initial Considerations
There are a few things to consider as you begin thinking about buying insurance. Of course, the first question is “What kind of insurance are you looking for?” There are many types of insurance, some you may have never heard of. If you’re about to buy a house, you’ll need to look into title insurance and homeowners insurance, among others. However, if you’re worried about floods, you’ll need separate flood insurance, since that type of damage isn’t covered by the typical homeowners or renters policy.
Even within a given type of insurance, there are different categories of coverage. For example, within a car insurance policy, liability insurance covers damage or injuries to other people, while collision insurance covers damage to your own car when you’re at fault for an accident. Not all types of coverage are included in every policy, so it’s important to examine your options closely.
You should also ask yourself whether or not you really need the type of insurance you’re considering. For one thing, the coverage your looking for may already be included in one of your existing policies, like your home or auto insurance. Furthermore, perhaps the risk or events you’re worried about are not great enough to warrant the cost of the premiums you’d be paying. For example, many people cannot afford the premiums for earthquake insurance. Similarly, some people no longer need life insurance because they’re older and have no dependents.
When to Buy Insurance
Obviously, you should buy insurance before the event that you’re insuring against happens. No company will sell you car insurance to cover an accident that has already occurred. So, you should purchase automobile insurance when you buy a car (in fact, you’re required to by law), and home insurance when you purchase a home (most lenders make this mandatory). And you should buy business insurance if you run your own business. For life insurance, plans are generally more affordable when you’re younger, and make sense if you have loved ones who rely on you for financial or other support.
Some types of insurance have specific windows of time during which you can purchase a policy. The most notable kind is health insurance. Generally, you must obtain health insurance during open enrollment periods, unless you qualify for a special enrollment period because of a significant life event, such as marriage or the birth of a child, or if you qualify for Medicaid.
Where to Buy Insurance
When buying insurance, it’s also important to research a number of different companies to find the right fit and avoid trouble down the road. You can ask friends and family for recommendations, but additional considerations include the following:
- Check on the volume of consumer complaints lodged against the company with your state’s insurance department.
- Evaluate the company’s financial stability by reviewing relevant reports compiled by organizations like Moody’s and Standard and Poor’s. You don’t want your insurance company to fold in 10 years, just as you’re getting ready to file a claim.
- Make sure the company is licensed in your state (or the state to which you’re moving).
- Get quotes from multiple companies and ask if they have any discounts for which you might qualify. For example, you can often save money by purchasing your separate insurance plans from the same company. Also, signing up for a higher deductible usually translates to lower premiums.
- Some experts recommend using an agent or broker who represents multiple companies to boost your odds of getting the best deal and coverage for your situation.
Finding the right insurance company can be difficult, and it’s possible, despite your best efforts, to end up with an agent or company who fails to abide by your state’s laws regarding marketing, underwriting, fraud, or discrimination. If that’s the case, you may be able to file a bad faith lawsuit, breach of contract lawsuit, or a complaint with the state insurance commissioner.
Having Insurance Issues? Speak with an Experienced Attorney
Buying insurance involves research and careful consideration of your insurance needs. Once you do have insurance, it can be difficult to know exactly what’s covered thanks to all the fine print. If your claim has been denied, or you’re dealing with an insurance company who engaged in misleading sales tactics or other misconduct, contact a local insurance attorney who can help protect your rights.