The beauty of insurance is that the right kind will protect you, your family and finances if you get out of work, your car gets damaged or stolen or if you need to stay in a nursing home. What matters is to get the right amount of insurance that matches your needs.
And though people know that they need to get insured, they don’t know from whom to buy it or what kind of insurance is right for them. Different insurance companies can have drastically different prices on the same kind of insurance. Coverage can also vary considerably from company to company.
There are a few ways you can go about purchasing insurance. You can purchase it from a captive agent who is affiliated with a specific insurance company. Another alternative is to buy it directly from the insurance company. There are also independent agents who work for themselves and represent several different companies. Usually, buying from an independent agent is preferable as you can choose from a few companies.
But possibly the best way to find a good insurance company (and an agent) is by researching and asking around. Ask your family, friends and colleagues if they are satisfied with their insurance plan. If they are, they will recommend their company to you. If they are not, they will warn you.
But don’t forget that insurance is a business. Never make impulsive insurance decisions under the pressure of an agent who will receive commission if you say yes. Read the insurance policy very carefully, making sure that you will get the right amount of coverage, with no limitations or unpleasant surprises. Get your agent’s promises in writing.
Before making a decision regarding insurance, ask yourself the following questions:
- What are the odds of gaining by buying this insurance and how often do people use it?
- How much money is the agent and the insurance company making by selling this insurance?
- Does other insurance already cover for the loss?
- Can you afford to incur that loss?
If you are discouraged from purchasing the insurance after answering any of these questions, it usually doesn’t make sense to buy it. But if have decided to get insured, try to opt for one with a free look period (usually from 10 to 30 days). It will allow you to cancel the policy without any penalty, if you are not satisfied with anything.
Also, don’t forget to check your coverage at least once a year. If you have purchased a new fancy car, you will need to reconsider your coverage. And if your mortgage is paid off, you probably don’t need to pay as much for insurance.