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Insurance: Consumer Tips

Insurance protects you from financial loss in the event of a disaster or other hardship. By purchasing insurance policies, you can receive reimbursement for losses due to car accidents, property theft, natural disasters, medical expenses, and loss of income due to disability or death.

General sources of insurance information include the American Council of Life Insurers (https://www.acli.com/), the Insurance Information Institute (http://www.iii.org/), the National Association of Insurance Commissioners (http://www.naic.org/) and your state insurance department (http://www.naic.org/state_web_map.htm). You can also visit http://www.insure.com/.

When buying any type of insurance (home, life, auto, rental or other), you should follow these tips:

• Find out whether your state insurance department offers any information concerning insurance companies and rates.
• Check several sources for the best deal. Search online or with an independent insurance agent. These agents work with several insurers and may be able to get you a better deal.
• Make sure the insurance company is licensed and covered by the state's guaranty fund. The fund pays claims in case the company defaults. Your state insurance department can provide this information.
• Ask your insurance agent about discounts. You may be able to get a lower premium if you have safety features in your home, such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing material. Similarly, you may save on car insurance based on your car's safety features, the number of miles you drive, your age (turning 25 or 50), your good grades (if you are a student) and/or your driving record (no moving vehicle violations or accidents in three years). You might also be able to get discounts if you are a member of civic or alumni associations, or insure your vehicle and home with the same company.
• Have you had major changes in your life (had a child, bought a home)? Life events affect your insurance needs.
• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premiums.
• Check the financial stability and soundness of the insurance company.
• Research the complaint record of the company. Contact your state insurance department, or visit the website of the National Association of Insurance Commissioners (http://www.naic.org/), which has a database of complaints filed with state regulators.
• Find out what others think about the company's customer service. Consumers can rate homeowner's insurance companies at http://www.jdpower.com/industry/insurance.
• Make sure you receive a written policy. This tells you that the agent forwarded your premium to the insurance company. If you do not receive a policy within 60 days, contact your agent and the insurance company.
• Shop around, even if you are satisfied with your current insurer. Your insurer may increase your rates annually, just because it can. Make sure your rate is still competitive for the level of coverage you need.

If you suspect fraud, call the National Insurance Crime Bureau's hotline at 1-800-835-6422. Check out http://www.insurancefraud.org/ for more information.

Insurance Scams

Be aware of these common signs of insurance scams:

• You may pay your insurance premium, but your agent keeps the money instead of forwarding it to the company.
• Scammers pose as insurance agents or are unlicensed to sell insurance.
• A series of brokers and reinsurers receive a portion of the money you paid for your premium, until there is no money left to actually send to the insurance company.
• You get notification for claims against your policy that you didn't file or services you didn't receive.

Take steps to protect yourself:

• Make sure to get a confirmation from the insurance company that your payment was received for the entire amount.
• Confirm with your insurance regulator that your insurance agent is licensed to sell insurance.
• Read claims and explanation of benefits statements closely, and check for errors.
• For more information or to file a complaint, contact your state insurance regulator (http://www.naic.org/state_web_map.htm).

Insurance-Sharing Services, Shared Risks

The sharing economy is popular. You may rent out your home or drive others around in your personal car to make extra money. Your insurance policy may limit your protection for accidents or damages that happen during these transactions.

Before you rent your home or drive your car as a service, ask your insurance company if you need to add to your policy, since you will be using your personal property for commercial purposes. Also, the shared service company may offer insurance coverage for damages or injuries.

Auto Insurance

Every state requires that you carry minimum levels of auto insurance coverage, or the equivalent in financial responsibility waivers, to ensure that you can cover the cost of damages to people or property in the event of a car accident. Auto insurance requirements vary from state to state. Check with your state insurance regulator (http://www.naic.org/state_web_map.htm) to learn more about individual requirements as well as insurers you may be considering for your policy.

There are multiple factors that can affect your car insurance rates, including:

• Your gender.
• Your age.
• Your marital status.
• Your credit history.
• The make and model of your car.
• The city and neighborhood where you live.

To find the best coverage at the best price, get quotes from several insurance companies; it may save you hundreds of dollars a year. You could also raise your deductible on collision and comprehensive coverage. If you have an older car, you might want to drop this coverage altogether.

Other Insurance

Contact your current insurance provider or state insurance commission for more information on these insurance policies:

• Catastrophic Health Care Insurance — A health plan that covers only certain types of expensive care, like hospitalizations.
• College Tuition Insurance — Get a refund of college tuition if you must withdraw because of a serious injury or illness.
• Dental and Vision Insurance — Some companies that offer health insurance plans may also allow employees to purchase separate dental and vision plans, which are not part of most standard health plans.
• Identity Theft Insurance — This type of insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. This insurance may be part of your homeowner's insurance policy or may be a stand-alone policy.
• International Health Care Insurance — This is a policy that provides health coverage no matter where you are in the world. The policy term is flexible, so you can purchase it only for the time you will be out of the country.
• Liability Insurance — Insurance for what the policy holder is legally obligated to pay because of bodily injury or property damage caused to another person.
• Shared Services Insurance — Find out what insurance you need if you rent your home out or use your car to drive others for a fee.
• Travel Insurance — There are four kinds of travel insurance: travel cancellation insurance, baggage or personal effects coverage, emergency medical coverage and accidental death insurance. Visit https://www.insuremytrip.com/ to learn more. Some travel insurance perks are provided by your credit card issuer.
• Umbrella Insurance — A policy that supplements the insurance you already have for home, auto and other personal property. Umbrella insurance can help cover costs that exceed the limits of other policies.