Saturday, August 31, 2013

What You Don't Know About Insurance Can Hurt You

This last year has been quite an informative insurance tutorial, not that I wanted one.

*My stepdaughter’s car had the misfortune of a drunk driver ramming it while she was in Seattle. Even though people nearby took photos of the license plate and of the obviously drunk driver. The police managed to pull a name and address from this information. The insurance company claimed they could do nothing with this information. In fact, they informed us since the car traveled out of the tri-state area they no longer insured it. We then had to deal with something called Gap insurance. Dealing with claims across state lines can be tricky. It took over two months to fix what should have been easy. The car had full coverage including uninsured driver.

*What I did learn from this was to beware that some insurance coverage can stop at state lines. Large companies such as Progressive or Allstate usually covers everywhere.

*Smaller companies, while often cheaper, sometimes go under or choose not to pay on a legitimate claim.

*Comprehension can be a very good thing on cars, especially when an act of God/Nature occurs like a hailstorm.

*A good agent is just as important as or more important than the company is. When we returned from vacation, I tried to get the car stored in the garage insured for my husband to drive. It took three phone calls, two emails and an entire month for this to happen. The agent even yelled at me for calling him so much, while he assured me he would insure the car. He did not. My husband drove around almost six weeks on promises to insure.  Because I did send written confirmation, the company would have still been liable if an accident happened. Still, I shouldn’t have to work harder than my agent did.

*Decide how much insurance you need. We have two old cars that carry liability only. We told the children if you wreck it, you buy the next car.

*Is your coverage still up to date? You think this is a no-brainer, but many a widow/widower finds out life insurance they thought they had, expired. Why is that? Some are limited to age. It is only good up to a certain age. They are planning on you dying after the expiration age. Other times companies go out of business without bothering to inform the clients.  (I experienced this with homeowner’s company. The mortgage company contacted me to let me no I was uninsured. No refunds were forthcoming, either.)

*Know your deductible. Currently almost all homeowner’s insurance is $1000 minimum deduction.

* Do have alternative plans to handle a high deductible. A recent unplanned stay at the hospital wiped out our medical saving account in one fell swoop. I can now see the advantages of programs like AFLAC, which offer secondary insurance.

* Watch what you insure for on your secondary insurance too. For years, I carried accident insurance on my daughter via AFLAC for all the sports-related accidents she used to have.  Turns out, I should have carried sickness because that is what I needed. This is a little bit of a crap shoot. You can be insurance heavy and never use it. You can buy the wrong insurance, as I did.

*Know your limits on the insurance too. A close friend carried cancer insurance because she was afraid someone in the family would get it. Someone did. However, the insurance had very low limits despite the money she poured into the company over the years. They cancelled her policy six months after her cancer diagnosis stating she’d reached her lifetime limits.

*What benefit do you get from your company after investing thousands in their business? Thousands you may never ever collect on. Different car insurance companies offer a good driver discount to a vanishing deductible.

*Don’t be afraid to shop around. When I moved to a new state, getting new insurance was a major headache. Buying a house was easier. This made me uneasy about switching agents even though I had the angry agent who yelled at me. I did switch. This time it was relatively easy and saved over $1100 a year on car and home.

Now, I would love to find an equally good deal on medical. Anyone have any suggestions?

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