Quick Insurance Tips

Many people ask about the advantages of using an insurance broker over working directly with an insurance company. If the prices are the same and the insurance company cannot charge more or less than a broker can what is the advantage of using a broker?

An insurance broker, at least a good insurance broker can be a less biased sourced of information. If your broker represents several of the companies that offer the type of insurance that you are interested in, he or she has an opportunity to save you both time and money.

For example a California commercial lines insurance broker may represent a half a dozen companies that can provide good coverage for businesses in his area. A good broker will select companies to work with based on their attractiveness to his potential clients. He or she will typically work with several companies because each one may have a different strength. One may offer better rates for smaller companies; another may offer better rates for larger companies.

Your broker can help you decipher the different policy provisions and compare the benefits. This can save you a lot of time. If you were to contact each insurance company directly, you will be given a lot of biased self serving facts that will make your decision making process harder.

Your insurance broker will in almost all circumstances receive his or her compensation from the insurance company. This compensation will have no impact on your price. You can get a lot of advice and service at no extra charge when you work with an insurance broker.

There are a lot of things that you can do to get a better price for insurance coverage. One of the better ideas is to shop around. Using a good broker can often reduce the amount of time this takes. However, you should have a basic understanding of the policies. You should also know enough about the companies your broker recommends to make sure that you select one that is stable and has a good reputation.

Lower Your Price by Lowing Your Risk Factors

Prices are determined by factors that are both within your control and those that are not. Being aware of the factors that you have some influence on is the first step in reducing your costs.

Auto Insurance

The biggest issue here is your driving history. Those who drive more slowly and thoughtfully tend to have fewer tickets and accidents. They will often be rewarded with better auto insurance rates. The car you drive can have an impact on your rates. More expensive cars can cost more to insure. Buying a sports car can raise your rates as well. You may want to get an auto insurance quotation before committing to a new car. Your location also has an impact on your auto rates. If you are thinking about moving, see how it will affect your insurance rates.

House Insurance

Your history of claims is a big issue here. Making intelligent choices about combustible materials can reduce your chances of having a claim. Also being conscious of safety hazards can keep you from being sued and having a liability claim on your insurance. Owning certain breeds of dogs and other pets, certain types of pools and even trampolines can have impact on your insurability and rates. Have a discussion with your agent before you commit to something that might raise your rates.

Life and Health Insurance

How much your life or health insurance costs is largely determined by your health history and your height and weight. Doing what you can to be healthy will tend to keep your rates down. Sometimes a little thing can mean a lot; you can miss getting a preferred rate because you are one pound overweight. You can also be one pound too heavy to qualify for a policy at all. You may want to ask your agent for help here. If your weight close to a point that makes a difference in your rate, you should be aware of that and see if you can get your weight down before you apply.

Disability Insurance

Health history and body mass index (height and weight ratio) are big factors for disability insurance as well although your occupation plays a bigger role with disability insurance. If you are thinking about changing professions, you may want to see if you can get a better deal by buying disability insurance now or by buying it after you change jobs. As a general rule, the more physical a job is the more you will pay for disability insurance. If you are an office manager who wants to be a carpenter, you may want to lock your rate in before you change professions.

There are several types of life insurance that are available today. Term life insurance, whole life insurance, universal life, return-of-premium life and single premium life insurance are just a few of the many types.

If you want life insurance for just its insurance benefits, term life may be the best. In another words if you don’t care about the cash build up in your policy a term policy may be all you need.

Term life insurance is similar to car insurance and home insurance. You send the insurance company money and they offer you protection. If you don’t have a covered event occur during the course of the term, no money comes back from the insurance company.

The average price for term life insurance is usually much less than the average price for a cash value type of insurance such as whole life. Term life insurance is ideal if you will need a lot of coverage until your children are done with their education, but will need dramatically less afterwards. Purchasing a large amount of term insurance is usually not very costly.

Be aware however that term insurance rates will tend to increase with each renewal. This is because your chance of dying this year is a little bit greater than your chance of dying last year, simply because you are a little bit older. Be sure to have your agent quote the prices you are likely to pay when your term policy renews.

Ten, twenty and thirty year term policies may be available to you. These plans will give you a fixed cost for the term you sign up for, but a much higher rate when they renew.

If believe that you will still have a need for insurance after your term is up, you may want to consider purchasing whole life or another type of insurance for the amount you will need then. This way you can lock in a rate based on your current age for that amount of coverage.

Finding the best insurance agent is often the first step towards finding the best insurance policy. Below are some of the ways you can use to help you find the right agent for you and your family.

One-Company Insurance Agents vs. Independent Brokers

As an independent broker myself I certainly am biased toward independent insurance agents who work with several insurance companies. However, I started out as a captive agent. A captive agent is one who works for one company and has a contract that doesn’t allow him or her to sell the products of other companies. I worked for Metropolitan Life (MetLife now) and Mutual of Omaha. Both were good insurance companies. However, in many instances they weren’t the best company for an individual client. Most of the time, an independent insurance broker will offer better products. However my wife and I have our auto and house insurance with a captive Allstate broker because Allstate had the best deal the last time we shopped.

Insurance License Suspensions

Insurance agent suspensions and formal complaints against a broker should be a red flag. You should be able to check with the insurance department of your state to see if an agent has either of those. Not all suspensions are equal. I was personally suspended several years ago because I took the wrong continuing education course by mistake and didn’t meet the requirements necessary to renew my license. I took the right course shortly after I was told about the mistake and was reinstated shortly thereafter. However, many times complaints and suspensions have merit. Most ten-year agents have no complaints and no suspensions. Even one should make you cautious.

Education and Experience

Education and experience are important. An agent who has taken insurance courses beyond what the licensing department mandates is probably a good agent to work with. An agent with at least three years of experience will probably do a better job for you than a new agent.

Referrals

A great way to find an excellent agent is find one by referral. However, many people will refer an agent because they like him or her and got a good feeling when they met with him or her. This is valuable feedback. However, a referral from someone who has worked with an agent over a long period of time may be more valuable.

An agent whom you respect, who helped you with your house insurance, may be a good person to talk to regarding other insurance types he or she doesn’t sell. Agents are often good at spotting good and bad agents and reputable agents will tend to recommend other agents who are reputable. My reputation is on the line when I refer another agent so I do so with caution. Most other experienced agents feel the same.

One of the many challenges to the entrepreneur is deciding on the type and amount of insurance to get for themselves and their families. Many business owners came from an environment where their employer created their benefits package and presented either a “take it or leave it” plan or one with few choices.

Many don’t think about creating employee benefit packages for their small business until they have other employees. They come to us and ask us for free business general liability insurance quotes, other business insurance quotes and when bringing on a new small business employee, a health insurance quote. However a good benefits package consists of much more than just health insurance benefits. In America everything costs money and the big things should be insured and/or planned for. Some of the important things to include in your personal benefits package include:

• Disability Insurance
• Life Insurance
• Retirement Planning
• Long Term Care
• Health Insurance
• Dental Insurance

A lack of disability insurance is one of the things that hurts families the most and is a line of coverage that is too often overlooked. The combination of unpaid medical bills and the inability to work that often comes with a medical condition is the leading cause of foreclosure and bankruptcy.

Finding the best disability insurance company for your needs is important as some companies focus on blue collar workers, other on gray or white collar workers. You should be able to find a policy that combines long term and short disability insurance. If a policy that covers you completely isn’t available or affordable, a policy that covers part of your need may buy you the time to be retrained in another profession.

Disability insurance is something that deserves more attention than some of the other insurances, but only because it is often overlooked. Be sure to cover all of the important insurance areas and not just one or two. Having limited coverage in each area may be more important than having full coverage in all areas.

The cost for private medical insurance is controlled by several factors. Unlike group health insurance, you have control over many of them.

The factors used to calculate a rate for an individual health insurance policy include your age, gender, zip code, smoking status, height to weight ratio, health status, your choice of company and your choice of plan, deductible and other options.

Age impacts the price for health care insurance since a group of 1000 people who are 20 will have fewer medical bills than a group of 1000 people who are 50. Insurance companies look at statistics and determine how gender, location and smoking status impact morbidity and therefore their costs to insure their policy holders.

The factors that you have some control of include:

Location can have an impact on your rates for insurance of all kinds. Your place of residence to a large degree determines which doctors you will go to. If you live in an area where the doctors charge more, your insurance company will likely pay more and they may pass those costs on to you.

Smoking not only has a big impact on mortality, but it also has a big impact on morbidity. You are more likely to get sick at any age if you smoke. Insurance companies are very much aware of this and often give discoutns to non-smokers or charge surcharges to non-smokers.

Your height to weight ratio or body mass index can also have a significant impact on the cost of your policy. Losing weight is difficult, but too much weight can mean that your health insurance policy costs more than it would otherwise. In some cases it means that a policy will not be available to you at all.

Shopping around for medical coverage is always a good idea. When you get health insurance quotes from multiple carriers, you may find that there is a big difference in the cost of similar policies. Choose your company and policy well.

Selecting the right amount of coverage is also important. A higher deductible plan may be much less expensive than a low deductible plan. Usually you will save more in price than you will lose in coverage.

The current recession is forcing a lot of people to request quotes from short term health insurance providers. US unemployment statistics are moving in the wrong direction and more people find themselves looking for alternatives to COBRA.

What’s Wrong with Temporary Health Insurance?

What’s wrong? Mainly the fact that it is temporary. This means that if you develop a condition while you are covered by a temporary coverage plan, you may have your bills covered for expenses incurred during that time, but not afterwards. In many cases a medical condition that rears its ugly head during the term of a short-term policy will be considered a pre-existing condition should you seek coverage after the term has ended.

The main draw backs of temporary health insurance are:

• Preexisting conditions are not covered
• Preventive care isn’t covered
• The coverage cannot be renewed

What is Good About Temporary Health Insurance?

What’s good? The price. Usually the most affordable medical insurance is a short-term plan. Often a short-term plan can cost half as much as a similar permanent plan.  This makes these plans very attractive, especially in hard times.

You will have to weigh the obvious benefits of paying a lower price and not so obvious potential harm that a having less robust coverage can do to your family. An individual health insurance policy is often the best solution. It will usually be less expensive than a similar COBRA plan and offer more coverage than a similar short-term plan.

Your chance of being disabled during your working years is much greater than your chance of dying during your working years. disability insurance quotes However, life insurance is something we think about much more and the people buy more often. Very few people get disability insurance outside work-sponsored plans and often these plans are inadequate. They are often terminated after one leaves their employer.

Disability and Foreclosure

More houses are foreclosed on due to medical issues than anything else. If we are healthy, most of us will find a way to pay our mortgage and keep food on the table if we are laid off. We may find another job that pays less, and forces us to cut back on certain expenses. However, we’ll probably be able to pay our mortgages. However, if we are disabled, we don’t have the same options.

Factors Influencing Disability Insurance Prices

Prices for income protection insurance are based on several factors. Prices are to some degree job specific. Disability insurance for a computer programmer will be less expensive than a policy for a truck driver if everything else is the same. Age, health the amount coverage and length of time the benefits are to be paid are all factors.

Disability Insurance and Age

Applying now, verses next year means that you may get a better rate due to the age factor.

Disability Insurance and Occupation

Applying when you have a low risk job can also help you get a lower rate. Conversely if you are now in a lower risk job than you were when you purchased your existing disability insurance policy, you may benefit by getting disability insurance quotes again. If you are significantly older now, the age factor may over shadow the occupation factor.

Purchasing hospitalization only insurance is like buying an automobile insurance policy that only protects you against 4 cylinder cars. It it inadequate coverage. Medical treatment consists of much more than hospital care. Physical therapy, MRIs, doctor’s visits, X-rays and labs are all part of medical care.

If you are sick enough to require a hospital stay, you will almost certainly require care in the doctor’s office before and/or after your stay in the hospital.

If you need to lower your costs for your medical insurance, purchase a high deductible plan that provides coverage both in and out of the hospital.

Getting the best deal to insure your teen driver starts before he or she is able to drive. If you try to shop for insurance after your kid starts to drive your options will be limited. Why? Teen drivers have the least experience and the most accidents. Your current insurance company will not drop you just because your child started driving. However a competing company may not let a new customer buy a policy who has a teenaged driver. If they do let you buy, they may not give you their best rate.

1. Shop for car insurance before you have a teenage driver.
2. Ask about good student discounts and driver’s education discounts for new drivers.
3. Switch to the company that will offer you the best deal before your oldest gets their license

Strategy for Getting the Best Deal

Shop for the best rate when your oldest is a year or so away from being eligible to drive. Ask each auto insurance agent to calculate the best rate for your present situation and for the situation you expect to have when your child begins to drive. Explain that you want to switch policies now. Switch policies early so that you are an existing policy holder before your child starts to drive.

This strategy has the added advantage of letting you know in advance the approximate rate you will pay when your “baby” starts to drive. Also since your car insurance rate may be impacted by your child’s grades, this may give you some extra incentive and leverage to motivate your child to do their homework.