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Confused About Shopping for Insurance? Maybe This Can Help

July 27, 2018 | By Mason Roberts

Insurance, like air and water, has become one of those life necessities in this day and age. Whether it be ‘must have’ insurance (e.g. auto, homeowners), ‘should have’ insurance (e.g. health), or ‘nice to have’ insurance (e.g. life, renter’s, disability), comparing the nearly infinite number of insurance companies and the policies they offer can seem like an impossible task. Use the following tips to make this process less stressful and help you to make a confident, informed decision.

Check Insurance Company Ratings

Like any other significant purchase you make, it’s important to do your homework and educate yourself about the insurance companies you are considering using. As no two family situations are identical, you need to how and what to compare to find the company and coverage that is right for you. Where do you start? Assessing an insurance company’s financial strengths & weaknesses is critical, as you certainly don’t want to go with a company that could be out of business down the road. Cost is obviously a consideration, but yet only another part of the equation. As you dig deeper in your research, you’ll also want to compare specific coverages, consumer complaints, and make a final decision based on your individual needs and wants.

Traditionally, the standard for determining an insurance company’s financial condition has been Standard and Poor’s, a highly-reputable longtime financial services and insurance ratings company. They rate companies for creditworthiness from “AAA” through “D”; naturally the higher the rating, the more reliable and stable the company - and the more at ease you’re likely to be with your selection.

Compare Coverage

Insurance coverage can often be viewed in a similar fashion as snowflakes, as no two are completely identical. While trying to compare the same coverage among different companies is the smart thing to do, be sure to look for those ‘little’ differences that may have a ‘big’ impact later on. Different insurers may offer a variety of deductible plans, or optional add-ons and riders. These may initially seem to be insignificant, but when added together they can have a considerable impact if you need to make a claim. That is why it is so important to make sure that you are aware of all of these factors to avoid unpleasant surprises if you have to file a claim.

Also consider the possible combinations of the insurance coverage that you have. For instance, if you have a good health insurance plan, you probably don’t have to absorb the extra cost of Personal Injury Protection (PIP) for your auto coverage. In addition, if your car is old and has more sentimental value than monetary value, you can probably avoid the added cost of collision coverage as well.

The bottom line here is do your homework to get a true, realistic assessment of your insurance options. Take note of not only all the plan similarities, but the differences as well, no matter how small or seemingly trivial. Where plans differ, explore up-front costs versus possible claim costs and deductibles, as a small savings on the front end could result in extra costs on the back end (or vice-versa). If you can’t find answers online, don’t hesitate to contact the companies directly. How they respond to your queries may also provide you with some basis for comparison. A representative who takes the time to explain things clearly and concisely is likely to gain your confidence, whereas one who rushes through the information or doesn’t seem interested in earning your business may convince you to look elsewhere.

Compare Complaints

Once you’ve narrowed down your list of potential insurance company selections, it’s advisable to investigate their complaint histories. This can be easily done by accessing your state’s insurance department/commission website, or using the National Association of Insurance Commissioners’ Consumer Information Source. This site let’s you enter insurance company names and coverage types to provide you with summaries showing ratio complaint reports (the ratio of an insurance company's U.S. market share of closed complaints compared to the company's market share of premiums). In this manner, you can compare your selected company’s complaint ratio number with the national median. In addition, you can view a Complaint Trend Report and find out if your selected company’s complaints have been trending upward or downward.

Even if you’re adequately insured, an insurance claim can sometimes put a crimp in your cash flow, with the cost of deductibles, missed work and so forth. If you do find yourself in a pinch, getting a fast cash installment loan may be just the ticket to provide you temporary relief until your life returns to normal.