Shopping for insurance is intimidating. There are countless insurance companies, each promising the best price and coverage. When it comes down to it, however, they can’t all be the best fit for you and your family’s needs. And because being underinsured or having no insurance at all places you at serious risk financially, and in terms of being able to pay for much-needed medical care, obtaining health and automobile insurance coverage isn’t an option — it is an absolute necessity for the well-being of your family. Given this, how do you find the right company and insurance plan for you and your family?
Assess Your Needs
Before ever beginning the insurance shopping process, you should sit down and determine what you and your family need from your insurance. Coverage is the most important aspect of shopping for any kind of insurance. In the case of car insurance, choosing the right liability coverage involves determining how much you can afford to pay for an insurance policy and how much you can afford to pay out-of-pocket in the case of an accident. In addition, you should determine how well your monetary and automobile assets will be protected.
The primary purpose of auto insurance is, after all, to protect you financially in the event of an accident. As such, blindly choosing the cheaper coverage plan is never a good decision because of the financial threat it presents. For instance, if it is your fault that another driver is harmed in an accident, and you have very low liability coverage, you leave yourself open for paying a substantial amount of out-of-pocket money to cover the other driver’s car repairs and medical bills beyond what your insurance company is contracted to pay. With this in mind, consider the four most important types of insurance coverage:
- Liability — Bodily Injury. In the instance of an accident that is your fault, this coverage provides finances for medical care, lost wages, etc. to the party/parties involved in the accident.
- Liability — Property Damage. In the instance of an accident that is your fault, this coverage provides finances to the party or parties involved to pay for their property damage (i.e. vehicle).
- Uninsured Motorist. In the event that an uninsured motorist caused damage to yourself or your property, the insurance company will pay for your medical related expenses and, in some states, your property that was damaged in the accident.
- Underinsured Motorist. In the event that another motorist causes an accident and does not have sufficient liability insurance to cover all of the damages you incurred, your insurance company will pay for those damages; this type of insurance varies on a state-by-state basis.
Ultimately, deciding what coverage is right for you should be balanced between what you can afford and how much coverage you need.
In terms of health insurance, it is imperative to understand that the big picture of such coverage is to protect you and your family in the instance of an unforeseen medical emergency or illness. Yes, health insurance is used regularly for small, non-life threatening medical care, like medication or doctor visits. However, it is medical emergencies and illnesses that rack up serious medical bills. No one thinks they’ll get something like cancer or heart disease, but both conditions are leading causes of death in the U.S. according to the Center for Disease Control. Not having proper health coverage can easily bankrupt a family or worse, obstruct their ability to obtain the medical care they need to live a long, healthy life.
There are many things to consider when shopping for health insurance, and some of them require analysis. For example, it is in your best interest to consider your extended family and their health conditions. If breast cancer runs in your family, you may want to consider a more comprehensive, and thus typically more expensive, health insurance program in case you also develop the condition. Switching providers after you’ve developed a health condition will be difficult and expensive; after all, insurance companies denying coverage for preexisting conditions is a story told frequently, though new insurance laws may alleviate that situation. Generally, the things to consider when searching for the right health insurance for you are:
- How much you are willing and able to pay.
- Which type of insurance best suits you in terms of your health needs.
- How much coverage you need. A family with expensive medical conditions will need more coverage than one without any.
Determining the Right Insurance Company for You
Once you’ve determined your insurance needs, finding the right insurance company for you involves two considerations. First, you must consider the plans offered by your prospective companies. Each company is different and their plans differ as well.
In the case of auto insurance, you should consider which company offers you everything you need at the price you want. Always get estimates (they’re free!) and always tell your potential insurance agent about things that may save you money, such as:
- The completion of a recent defensive driving course.
- Theft-related devices, such as a security alarm or GPS unit.
- Willingness to pay your premium in a lump sum versus a payment plan.
- Good grades in school; insurance companies for teenagers will often give discounts for this as it demonstrates a responsible driver.
- Willingness to bundle multiple policies, such as auto, life, and health insurance.
In the case of health insurance, it is imperative that you analyze all of your prospective plans closely. Ensure that you know that the following before ever committing to a health insurance plan:
- The health conditions you already know about will be covered; for instance, if a medical condition has caused weight gain and you need surgery, you should research insurance companies that cover gastric bypass surgery.
- Your current doctors will be covered, or in your “network,” if you don’t wish to switch providers.
- Local emergency clinics and hospitals will be covered.
- The services and treatments not included in your plan’s coverage.
The second thing you must consider when choosing an insurance provider is the company itself. Aside from the price of a company’s offered insurance plans, always determine the following:
- Is the company licensed?
- Does it provide good customer service?
- Does the company have a good reputation? Search for insurance companies on Facebook and other social media outlets to see what their customers say about them. Also, each state has an insurance department and most state departments publish consumer-related information pertaining to complaints brought against an insurance company. The National Association of Insurance Commissioners has a full list of all state departments. Insurance companies dropping sick people from coverage is not unheard of; thus, it is in your best interest to find a company that is reputable and reliable.
- The company’s financial standing, i.e. ability to pay claims. This can be determined by running a “Ratings & Analysis” search on AMBest.com.