You don’t want to make any hasty moves because one move too soon could mean losses in the thousands over the long term. Not all insurance companies are on your side or in business to protect you. In fact, I’ve found that many are simply out there to swindle your money.
I’ve compiled a list of tips to take into consideration when purchasing a new insurance policy. Hopefully these tips will help you make a wise decision and save yourself countless headaches.
1- Research consumer complaints
This is probably the most important tip on this list. Knowing what the complaints are against a company will tell you how solid of an insurance company they are. Companies with the fewest complaints are typically the companies that make an effort to provide excellent customer service.
2- Check agent’s credentials
This is another tip that will make an agent extremely uncomfortable or very confident. Always ask for an agent’s credentials, no matter how small the insurance policy. I have heard horror stories of insurance agents selling completely false insurance plans and then a big accident happens. Well guess what? No insurance coverage for that person. Don’t find yourself in this situation; it’s truly something you can avoid by simply asking for credentials or looking into their background online.
3- Shop around before you make the big move
You shop around for things like cars and clothes, so why not insurance packages? Research prices from various insurance companies and compare quotes. I recommend comparing at least five quotes before you make your final decision. A long term contract with an insurance company is something that you want to be 100% confident in. Spending 30 minutes shopping around could literally save hundreds or even thousands of dollars.
4- Research the company’s ratings
Insurance companies are always competing for higher rankings. By researching ratings and review online, you can find out which companies place an effort on providing higher value and which ones couldn’t care less. Do your due diligence; you might even be surprised at the companies that don’t fare too well.
5- Get the right coverage but don’t get too much
Never let an agent tell you how much insurance or coverage you need. This is something that is your responsibility to figure out. Letting an insurance company tell you what you need is like asking a casino how much you should gamble. Whether you need an umbrella policy or extended coverage, this is for you to decide, not an agent. Come to the meeting with an agent prepared, not at a loss for words. Remember, insurance agents work on commission, so the more they sell you, the more money they make.
6- Ask some tough questions
Insurance is a significant financial decision. Take the time to really ask the tough and important questions. Make it your goal to make your agent squirm in his chair. If he answers all of your tough questions and you’re satisfied, you’ve most likely found a great insurance company to give your money to. If the agent can’t or won’t answer your questions directly you may want to look elsewhere.
7- Take a “free look”
This is a wonderful opportunity to really “get to know” your insurance policy. Whip out that bad boy and study your policy. If you are not completely happy, return your policy within a few days and get your premium back. If the insurance company tries to tell you they don’t allow it, don’t back down. All policies are required to have a free look period, but the length of time varies. Ask what it is up front so you know how much time you have.
Well, hopefully this has helped. Now, when you are on your quest for insurance, you won’t be lost. Take these principles and print them out. Keep them nearby when you are speaking with an insurance agent. If you ever feel awkward or hesitant, that is a sign that it may be time to end the conversation and consider a different company. Take your time and make a decision you and your wallet can be proud of!
Author: Jon the Saver
I would say that most insurance and warranties get sold via referrals. A friend's recommendation could really make a difference to which company you choose for your car loans or picking up insurance policies and it's quite rightly so when you ask them for their opinion!
What a great article about how to choose a good insurance policy. I really like that you mentioned to be willing to ask the hard questions. I think that is something that a lot of people aren't willing to do these days. They kind of just look at the policy as is and not ask questions. I also agree that buying insurance is a big financial decision, and making sure that you fully understand what you're getting is very important in my eyes.
You made me realize that buying home insurance is a much more delicate process than I realized. I liked your tips about asking tough questions to the agents. I did not know that they were paid on commission, so that is good to remember. I feel a lot more confident about shopping around now, keeping in mind that I can return the policy within a free look period as well.
Before buying home insurance get full information about the company and there claiming policy, so that you get all the benefits at the time of damage. Also get ready to negotiate with the company.