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Know The Most Important Insurance Tips And Buy The Best Policy

The best way to tide over a sudden monetary distress is a suitable and reliable insurance policy. Be properly insured and you are bound to enjoy a secure financial future and boost your savings.

However, it is very important to get hold of an insurance policy that suits you best. For that, arm yourself with the most important insurance tips before you avail of a cover that either involves your health, home, car, other property or protects you against accidents, natural calamity, robbery etc.

There are endless varieties of policies in the insurance market. They are either optional or mandatory.

1. Auto insurance: It is mandatory in most states. It serves a dual purpose of insuring against your legal responsibility towards others in case you cause an accident and to cover damages to you and your car by others. Your liability insurance requirements depend on your asset amount. Your car insurance depends on your car and your financial ability to replace it in case of severe damage. If you own an expensive car and cannot afford to replace it easily, go for a comprehensive and collision policy. If your car is old, you would not gain much from this insurance.

2. Life insurance: Though it is optional, life insurance is vital especially if you are the only earning member of the family. They are mainly of two kinds, one that matures only at the death of the insured person and the other is the cash value insurance, which can be surrendered and converted to cash. The latter is also a popular savings method.

3. Health Insurance: Though this insurance is mostly provided by the company you work for, in case it does not, it is essential for you to have one. For good saving and comprehensive cover go for a group policy.

There are three types of health insurances:
  • Fee for service
  • Preferred provider option (PPOs)
  • Health maintenance organizations policies

4. Home Insurance:
This insurance covers your home and property against natural calamity. There are various rates from various companies so when you compare them follow these most important insurance tips:

  • Check what the policy covers
  • Take into account differences among deductible, coverage of possessions other than the home (out houses, car sheds etc.), and percent of deficit covered.
  • Check whether the policy covers resale or rebuilding cost. Rebuilding coverage is more costly but ensures better coverage.
  • Basic home insurance does not cover the contents of your interiors you can insure it for an extra fee or buy it individually. When buying contents insurance, check if it provides replacement or fair market value cover. The former is a better option because it pays to buy a fresh piece of content rather than what your old one is worth.
  • Also, go for a liability insurance, which protects your property against damages or loss.
  • Renters and condominium owner insurance safeguards only contents and liability. There are policies customized for this group.

5. Appliance insurance: This is mostly applicable for appliance storeowners. It is hardly of use if you are buying small appliances for your home. Moreover, they generally cover only low-risk periods and have many riders.

6. Travel insurance: This is another optional insurance that protects against risks when you travel.

More handy tips:
Also, keep the following most important insurance tips in mind while choosing any policy:

  • Check whether an insurance policy meets your needs.
  • Check the cost according to what you can afford and the returns you get. See how much you gain by your premium paying methods.
  • Check for the flexibility of the policy and the payment details. There may be grace period in case of payment delay and money back options if you give up the policy.
  • Know the clauses in case you switch to a new insurer.
  • Review your policy vis-a -vis your changing financial circumstances every time you renew it.
  • Check the license of your agent and company: You can always refer to www.insurance.ca.gov for license details of all agents and companies. Moreover, all agents must display their license numbers on all business cards, quotations and advertisements.
  • Don't get bullied or carried away by agents: One of the most important insurance tips includes checking out many agents instead of settling for the first one who might be extremely convincing. Moreover, stay away from agents who resort to coercive sales strategies.
  • While filling the insurance application give all correct details: False information or lack of it may not get you a policy or lead to its cancellation later. Never leave any clause blank, for corrupt agents may use this to their benefit.
  • Be careful before you sign on a document: If anything remains unexplained by the agent don't sign it. Keep making queries and take down the points. Later clear your doubts from a trusted source, compare with other policies and then sign on the dotted line.
  • You must compare policies: Don't settle for the first policy that seems suitable to you. For the best coverage suited to your financial situation, compare thoroughly.
  • Make timely payments: Pay on time keeping mailing period in mind. Even if there is a grace period for late payments, don't take a chance. Never pay up in cash. Checks or money orders in the name of the insurance company, agency or other billing institutions are safest.
  • Read and understand your policy: Once the policy is at hand make sure again, that it is exactly what you asked for and check for errors. Most life and health insurances have a "free-look" period ranging 10 to 30 days, so read your policy the moment you get it.
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