How To Select A New Insurance Company

Many people are loyal to their insurance company, and that is great. In fact, usually having longevity with an insurance company will pay off in the long haul. It usually results in easier claims handling, better rates, and better customer service. However, there are quite a few people who, despite not wanting to, end up switching insurance companies. For whatever reason it may be here are a few tips to help you along the way.

-First, understand the insurance laws in Arizona. You should know what your responsibility is as a licensed driver and what coverage is mandatory and which aren’t.

-Second, gather all the necessary information an insurance company would need in order to give you and actual price and not just a ball park figure. This would include the Names, DOB’s and driver license numbers of all drivers in the household. Have the vehicle identification numbers (VIN’s) ready, this will give the insurance agent access to the safety features that your vehicle may or may not have. And let’s not forget that in the state of Arizona credit is used to determine your final rate, so you will eventually need to provide your social security number once you find an insurance agent that you trust.

-Third, call around to various insurance companies and brokers. Give them the information that you have gathered and let them know that you are shopping around but would like to give them the opportunity to give you a quote. Let the insurance agent know that you would like as many discounts as possible in order to achieve the best rate available to you and your family.

-Fourth, once you have chosen an insurance company meet with your new insurance agent. Have him explain in detail your policy. Take notes and make sure that you have adequate liability coverage and physical damage coverage on your vehicle. Find out if towing is included or if rental coverage is on your policy in case you need to use it sometime. You want to make sure you are covered before a loss takes place, there is nothing worse than something terrible happening and finding out that the insurance company is not covering you correctly. Also, if your insurance agent looks like a wreck then when it comes time to file a claim your customer service probably will be as well.

-Lastly, keep your insurance information readily available. You never know when you may need to pull out that policy and take care of a claim.

Now you have what it takes. If you need to switch companies, make sure you take all of those steps, it will ensure your satisfaction in the long run.

How Much Liability Coverage Should I Have?

Many people face this question every year when they are reviewing their insurance policies. It comes time to look at that auto insurance policy and you notice that you have been pouring a lot of money into XYZ Insurance Company’s bank account. You wonder how on earth can you lower your rate, and typically the liability coverage is the first thing to be scrutinized. Is having $300,000 of liability on your auto insurance too much coverage? Are you being over insured? Well, let’s take a look at what someone might actually need.

Insurance is to protect You and your assets. Let’s say that you are in an at-fault collision and the person or people that you hit needs to go to the hospital. It’s not uncommon to be in the hospital for 5-7 days if you have a minor head injury, much less a serious injury. So the person you hit misses 3-4 weeks of work due to a surgery that was required because of the accident, and guess what else…. Yep, they don’t even have health insurance to take care of the medical bills. Before you know it, after medical bills and loss of wages this person’s attorney is generously asking for 6 figures to help restore his/her client and take care of the incoming bills. You better hope that you don’t have only $100k of liability coverage because if the settlement is anymore than that, you will be required to flip the bill. So, you’re probably wondering what is going to happen if you don’t even have that much money. Through the legal system the courts can decide if this injured person is entitled to the funds in your 401k or IRA or even the equity in your home. Another asset a lot of people don’t think of is your ability to earn an income. Wage garnishment is a harsh reality for a lot of people who did not have adequate coverage when it was so desperately needed.

Consider the cost difference between $100,000 of liability and $300,000, it is very minimal. I typically recommend to my clients to carry at least $500,000 of liability, the more liability coverage you have the cheaper it actually is per $1000 of coverage. So the next time you are looking to lower your auto insurance premium, don’t sacrifice your coverage.

Break Out Your Umbrella

Umbrella policies are definitely the most underestimated insurance product out there on the market. I don’t know of too many agents who recommend them on a regular basis and I know of even fewer people who have one. What is an umbrella policy you ask? I explain it to my clients as being an extension to the liability limits you already have in place on your current insurance policies, namely your auto and home insurance. Let’s say that you are in a severe auto accident and are found liable for hundreds of thousands of dollars in medical bills for 2-3 people. Once a settlement is reached in court they will require the insurance company to pay out according to the liability limits in place on the policy. If those limits are not enough to pay the settlement you will be held responsible to come up with the remainder of the balance. However, those who have an umbrella policy will be able to lean on the umbrella to take care of the short fall. It is very rare for an occasion to arise that would require your umbrella coverage to be utilized, but the fact is that there are indeed reasons to have one (especially if there is a teenage driver living with you). For example, I found this article in the “The New York Times” (http://www.nytimes.com/2008/03/18/business/businessspecial3/18insure.html?_r=1&pagewanted=2&ref=businessspecial3)

“One of Mr. Cox’s clients crashed into the rear of a car on a slick highway. A woman and a child were critically injured. After two years of litigation, his client settled the lawsuit for more than $5 million. The client had $15 million in umbrella coverage. The policy paid for the settlement and all legal costs. “Without the umbrella,” Mr. Cox said, “they would have been completely wiped out.”

Because of how seldom umbrella policies are actually used to pay out on a claim, they are very affordable. Your average 2 car & 1 home family can expect to pay anywhere from $175 - $250 a year for a $1 million umbrella, the more ‘millions’ you purchase the cheaper it is per million dollars of coverage.

Talk to your insurance agent today if you don’t have an umbrella. Ask him/her to give you a quote and find out if they can break it down to a monthly payment with your auto insurance because it’s definitely worth the extra $15 a month.

It's Expensive To Let Your Car Insurance Cancel!

During these tough economic times I have noticed amongst my own clients a large increase in those who don’t make their insurance payment. Although this may help you get through yet another month of paying bills it can also have a very expensive effect on your current insurance rates. In the state of Arizona every Valid Driver License Holder has the responsibility to obtain and maintain automobile insurance. In the event that we go even 2 days with out insurance we will then have to file form SR-22 with the Department of Transportation. The SR-22 (Financial Responsibility Form) is a notice from your insurance company to the MVD that electronically notifies the State when your policy is cancelled. When this takes place your vehicle registration is automatically suspended. By needing to file the SR-22 you more than likely can not qualify for any preferred rates nor will you qualify for a good driver discount despite a good driving record. Not only will you not get preferred rates, many times it is even more difficult to qualify for a standard rate. Many people have to go with a non-standard rate and drop many discounts that they once had.

So if you ever find yourself in the dilemma of not being able to make your auto insurance payment you will be better off at least calling your insurance company to make the appropriate arrangements. Many times they can change what day of the month your bill is due, they may be able to extend your grace period or they may even be able to let you spread that month’s payment over the next 2 or three months. I know for a fact that you insurance company would rather work with you than have your policy cancel.

How Much Life Insurance Should I Have?

Nobody likes talking about life insurance. Let’s face it, it’s not very fun planning what needs to be done in the event of your death. But can you imagine being the person who does have to do the planning after you are no longer here? There are 2 common questions that I come across when helping my clients with their life insurance plans. HOW MUCH COVERAGE SHOULD I HAVE? And WHAT TYPE OF LIFE INSURANCE IS BEST?

The amount of coverage you really need is only something that you and your loved ones can decide. It is a very personal decision. I urge many people to consider what they want their policy to be able to do. Do you want to pay off the whole mortgage or just a portion of it? Do you want to be able to pay off all of your liabilities? Do you want your spouse to have to go get a job right away or do you want that person to have some time off? How about your kids? Do you want to pay for their college even though you are no longer here? These are the types of questions that we need to ask our selves when deciding how much coverage we need. The Insurance Information Institute recommends an individual carry as much as 12 times their annual salary in life insurance.

There are 2 general types of life insurance, Term Insurance and Cash Value Life Insurance (Mainly Whole Life). Term Insurance allows you to purchase more coverage for your buck. You can purchase the insurance with a guaranteed premium for either 10, 15, 20, or 30 years. The guaranteed premium means that during the 30 year term policy your premium will not change for the 30 years that the policy is in force. Term life insurance if great for everyone, especially for those who need the coverage but worry about their monthly budget. Cash value life insurance is a little more expensive. Let’s talk about whole life. Basically, unlike a term policy which has it’s 30 year limit whole life never expires. The premium is often times guaranteed for as long as you live. Whole life also builds cash value which can sometimes be used as a retirement tool. But like I mentioned, whole life is more expensive than term insurance which can sometimes not make too much sense when dealing with One’s budget. Personally, I feel that if someone is looking to help out with retirement there are better investment options available than doing so through life insurance.

So pull out your life insurance policies and review them today. Make sure you have enough coverage and that the premium is affordable for as long as you need the coverage.

Get All The Discounts You Can

Insurance companies definitely want your business. In return, you definitely want their discounts. All insurance companies offer a wide range of discounts. Some of the most known discounts are multi-vehicle discounts, safe driver discount, and the best discount, in my opinion, the good student discount. However, there are more discounts that are often times not applied when they could be. Each insurance company does vary when it comes to additional discounts, but for the most part they are all pretty similar. One of the biggest discounts is if you insure more than one thing with the same company. For example, if you have both your auto and home insurance (or renters insurance) or your life insurance and home insurance with them you could qualify for a multi-policy discount. Most companies these days prefer you pay your monthly invoice through some type of EFT (Electronic Fund Transfer) program from your checking account. The advantage to this is typically an EFT discount and not to mention a smaller ‘processing fee’. I have seen people save $250 a year just from changing from a paper invoice to an EFT plan. Let’s remember that your premium is generated according to how much of a risk you are to the insurance company to pay out a claim. So the more safe and secure either your home is or your car is the more discounts you can get. If you have an alarm on your car you may qualify for a safety device discount. Protecting your home is just as important; if you have an alarm installed in your home, whether it is a local alarm or a central alarm, this will generate an additional discount. Put a fire extinguisher in your kitchen and let your agent know. Also, if you live within a gated community, depending on the insurance company, this could generate another discount. Some homes even have fire sprinklers built-in, if this is the case that is definitely another discount.

I guess the point is that there are so many discounts available to consumers that we should always make sure that we are getting everything that we are entitled to. Speak with your agent sometime this week and find out what discounts your insurance company offers that aren’t currently applied to your policy. You don’t want to pay your insurance company more money than they need.

Why Do I Pay So Much For Car Insurance?

There are many factors that insurance companies take into consideration when determining your auto insurance rate. Not all insurance companies think each factor is as important as the other and thus creating such a wide range of auto insurance rates for just one consumer. First and foremost, the insurance company is going check out your DRIVING HISTORY. Statistically speaking, the more at fault accidents or tickets that you have, the more likely you are going to cost XYZ Insurance Company money. Secondly, they are going to look at your CREDIT HISTORY. A common misconception is that the insurance companies look at your credit report, for example, Equifax, Experian, or Trans Union. This is not the case. Insurance companies do what is called a ‘soft hit’ on your credit history, not your full credit report. Third, they are going to consider what TYPE OF VEHICLE YOU DRIVE. Is it an SUV? Does your vehicle have an excellent safety rating according to the National Highway Safety Advisory Committee (NHSAC)? Is it considered high performance, an antique, etc? Another important factor that XYZ Insurance Company looks at is HOW MANY CLAIMS HAVE YOU FILED RECENTLY? If you are prone to turning in a claim to fix the $180 dent in your fender, then that is going to cost you some extra money. One of the last things that will be considered when determining a non discriminatory rate for you is WHERE DO YOU LIVE? Many insurance companies will break their rates up according to zip codes. Some zip codes have more people, more traffic, and more accidents. This will affect your probability of costing XYZ Insurance money.

If you are negatively affected by one of these criteria, I recommend shopping your insurance around. Like I say, if you are paying more because of your claims history there may be another company that specializes in giving more affordable insurance to people in your situation. If claims are something holding you back from getting your best rate, consider raising your deductibles to $1000. You will be surprised at how much you save a year.