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Top Things to Know About Insurance

1. You are Just a Statistic

To your insurer, you aren’t really an individual person; you are a risk. Insurance [1] companies base the premiums you pay based on risk factors that include things like your age, driving record, occupation, assets and liabilities and health. Actuaries and underwriters use these factors to determine how likely or unlikely the insurance company is to end up paying out money because you get ill, crash your car, suffer a home burglary or die.

2. How Much Your Home (or Life) is Worth

When purchasing insurance, first you need to know how much the item(s) you are insuring is worth. For a home, you can have a local realtor or contractor give you an estimate. If you are insuring a car, use a resource like Kelly Blue Book or Edmund’s. If you are insuring your life, you should consult a financial advisor to help determine how much your family would need in the unlikely event of your (untimely) death!

3. Every Insurance Company is Different

Remember as with any product or service, your mileage may vary … or in this case your premium per mile! Not only do insurance premiums vary greatly, but also the terms and conditions of insurance policies also vary significantly from one insurer to another. It pays to shop around and compare!

4. Price is Only One Factor

While we all want the lowest price on insurance, there are other important factors to consider when purchasing a insurance policy. Some of these include;

5. Read Your Policy!

Homeowner’s insurance is famous for exclusions. Things like earthquakes, some types of flooding; even damage from pests may not be covered. Life insurance policies typically exclude claims in cases suicide within the first two years of coverage. There are hundreds of these “conditions” in the fine print of most insurance policies. And while it sucks to have to read one of these things, you will be sorry (or at least disappointed) in most cases later when you have to file a claim and discover something in your time of need!

6. Always Demand a Discount

Most insurers offer discounts for behavior that reduces risk; quit smoking and your life insurance could be three to five times lower; stop speeding and your auto insurance costs less; install a burglar alarm and your homeowner’s insurance may go down. But most people forget to ask for such discounts, giving the insurance companies an estimated $300 million extra each year!

7. Your Claims Agent is Not Your Friend

When you file a claim, do not make the mistake of assuming your insurance company is on your side. While he or she may seem friendly enough, a claims representative is paid to prevent unnecessary claims expenses from being paid out! If needed, get an attorney to represent you. If your car was totaled in an accident for example, you will almost always be offered an amount that is too low. Without being unruly or rude, you should be businesslike, insistent and firm in requesting a fair amount on your claim. In most cases, persistence results in a higher claims payment.

8. Keep Your Ducks in a Row

Always keep your insurance policies up to date, pay your premiums on time and keep records of your personal property and belongings. If you can’t prove that your Rolex watch was real with a picture, receipt and serial number, your claim may be rejected when your home is broken into and the thief swipes it! The best way to prevent insurance claims mishaps is to be prepared ahead of time by keeping good records.