You're spending your hard-earned money on a variety of insurance policies that protect your personal assets, so the last thing you want is bad insurance. Since most policies only renew once a year, it can be easy to forget about coverage until you need it.
Nothing is worse than needing to file a claim and realizing you have inadequate coverage or a difficult carrier to deal with. Fortunately, an insurance agent can help you shop quality insurance policies for whatever you need protected. Before you speak with an agent, these six signs show that you may have the world's worst insurance.
#1. Your insurance rates are super expensive
How much should insurance cost? This can be a loaded question, but you can get an idea by understanding the average price of coverage in your state. If you're paying significantly more than these prices, it's time to speak with an agent about changing your insurance.
Average cost of home and car insurance by state
#2. You Don't Have Enough Coverage
Sometimes you don't know if you have enough coverage until it's too late. You need to file a claim and realize your limits are not high enough to cover the damage. This leaves you paying out of pocket. Here's how to determine how much insurance coverage you need for the most common policies.
- Know state minimums: Most states will have required limits of coverage for common policies like homeowners insurance and auto insurance. At the very least you need to have your state's minimum coverage, and most of the time you need more.
- Calculate the value of what you're getting insured: Whether you're insuring your property, your business, or your life, determining the amount of coverage you need starts with calculating the value of what you're insuring. Your policy limits should cover the value to repair or replace your assets, or help your family pay for the cost of your death and any outstanding bills if you're dealing with life insurance.
- Keep liability in mind: Taking inventory of your assets is one thing, but you also need to consider the possibility that someone will sue you for being injured in your home, vehicle, or at your business. As an example, it's recommended that homeowners purchase $300,000 to $500,000 worth of liability coverage.
- Ask your agent: If you're uncertain whether you have enough coverage or not, speak with your agent about your concerns. They will go through your policies with you and help determine if you have sufficient limits or not.
#3. Your Insurance Company Isn't Licensed in Your State
Before you start working with an insurance agent or company, insurance expert Jeffrey Green says you need to make sure they're licensed in your state. You can find this information on your state insurance department's website.
This is also a good time to get a professional opinion about your coverage. When looking for an agent in your area, you can ask them to review your current insurance policies.
#4. Your Insurance Carrier Has a Low Financial Strength Rating
A financial strength rating tells you an insurance company's expected ability to pay its claims and meet other financial obligations. Typically, a company’s financial strength ratings are available on its website.
Currently, there are five agencies that conduct financial strength ratings, and each one has its own rating scales. For this reason, it's best to look at the ratings from multiple agencies before determining the financial strength of your insurance carrier.
How to contact rating agencies
|AM Best Company, Inc||www.ambest.com||Ambest Rd. Oldwick, NJ 08858||908-439-2200|
|Fitch Ratings||www.fitchibca.com||1 State Street Plaza, New York, NY 10004||1-800-75-FITCH|
|Kroll Bond Rating Agency, Inc. (KBRA)||www.kbra.com||845 Third Avenue, 8th Floor, New York, NY 10022||646-731-2368|
|Moody's Investor Services||www.moodys.com||99 Church Street, New York, NY 10007||212-553-0300|
|Standard & Poor's Insurance Ratings Services||www2.standardandpoors.com||55 Water Street, New York, NY 10004||212-438-2000|
#5. Your Insurance Company Has Poor Reviews
Another sure sign that you have bad insurance coverage is if you're working with a company that continually has poor reviews and complaints.
Insurance company reviews can be found in a multitude of places, usually with a quick Google search. You can also check the Better Business Bureau for the company’s rating, complaints, and reviews. Knowing any dissatisfaction or complaints that other customers have had can help you determine if an insurance carrier is right for you.
#6. You're Not Offered Ways to Save
Today, most insurance companies will offer a variety of ways for people to save on the cost of their insurance. Whether they reward for good driving behavior or being a long-term customer, a good insurance policy is one that makes it easy to keep your business.
If your rates are always increasing and you're not sure why or you're not receiving benefits for being a good customer, it could be time to move on.
Common ways insurance companies show loyalty
- Providing bundling discounts for purchasing multiple policies
- Offering loyalty discounts and good behavior discounts
- Communicating any changes in policies in a timely manner
- Avoiding unexpected price increases
How an Independent Insurance Agent Can Help You
Insurance comes in all shapes and sizes, and knowing if your insurance is good or not can be overwhelming. An insurance agent has your back from the beginning.
They'll chat with you, free of charge, and review any existing policies you have. They have expert insight on what is good and bad insurance and can help you get rid of the bad and replace it with great coverage. Independent agents aren't tied to one insurance company, so they'll search their network for a variety of quotes and provide insight on the best insurance carriers to work with.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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