Insurance Shopping Advice

When buying insurance there are rules, both spoken and unspoken that you should pay careful attention to. Below are some tips for what you should try to do and also what to avoid when you begin shopping for insurance.

5 Things to Do When Shopping for Insurance

Be honest on your applications

Lying on your insurance policy can give your insurance company reason and the right to deny any claim you make in the future if an investigation reveals that you lied when applying.

Discuss insurance coverage with your family

Especially life insurance policies. They should know who the beneficiaries are, what coverage is provided and how to file a claim with the company should the time ever come.

Consider carefully the level of coverage you need and buy the most you can afford

If you are looking for insurance, you understand the need to protect yourself in that specific situation. It would be a shame to get into an issue, accident or need to file a claim and find that your losses are greater than your coverage, all over a few extra dollars a month.

Compare more than just rates when shopping

You may see some very lowball rates when you are shopping for insurance, but there is more to insurance than just the low rates. Usually rates that seem impossibly low are skimping in major ways on coverage and you may find yourself with serious regrets if the time ever comes to file a claim.

Check your policy regularly and update it as needed

Life changes, and life circumstances as well. Make sure yur insurance company is up to date on any significant changes in your life that may affect your policy. For example, for auto insurance, if you change jobs and are driving significantly further to work, be sure to let your insurer know, or for life insurance, if you need to change your beneficiary for whatever reason, in case of a divorce, for example, make sure you act swiftly.

5 Things Not to Do When Shopping for Insurance

Don't Cancel any current insurance policy until you receive a certificate

Just because you receive a quote online or fill out an application, does not automatically mean you are insured. If you have current insurance, you should keep it in effect and continue making payments on it until you receive a notification (certificate) of insurance from your new company.

Don't Do anything to hinder an investigation if you file a claim

Be sure that an investigation will follow most claims for payment that you make on any insurance; you should be prepared to assist with this investigation in any way possible, for example, for a renters insurance claim, keep an inventory (using a list or a video camera) of all of your goods that might be stolen or damaged before you need to file a claim. Presenting that to the insurance company will go a very long way toward speeding up your claims process.

Don't Fall behind on your payments which may lead to cancellation at the wrong time

Every year people fail to make a payment or two on their insurance only to find out at the worst time that they have had their policy cancelled for non-payment. Once you start on an insurance payment, do everything in your power to make sure you continue, or else it could end up not helping you when you need it and essentially all of the payments you'd made will turn out to have been for nothing.

Don't Forget to report accidents and mishaps to your insurance company, even if you don't plan on filing a claim

This is especially true of auto insurance. If you get into even the smallest of fender-benders, you should report it to the insurance agency, even if it is not your fault or you have no intention of filing a claim, you should let your insurance company know about the incident in case something comes up later. Little is worse than coming under suspicion if you report something you thought was minor weeks or months after the fact and your insurance company asks you 'Why didn't you report this earlier?'

Don't Stop looking for ways to save on your insurance policy as situations in your life change

Things change in life and you need to remember to let your insurance company know about them. Failing to do so under certain circumstances could result in non-payment, for example if you get life insurance as a non-smoker today and take up smoking tomorrow for the next 15 years, then die without having told your insurance company that you have started smoking, you give them cause to reduce or deny the death payment to your beneficiary.

If any of these terms confuse you so far, you can learn some definitions of some of the terms in our glossary.