Choosing the Right Insurance

Things to Consider When Purchasing an Insurance Policy in general

  • Review your insurance needs and circumstances.
  • Comparison shop. Contact several companies and/or agents to compare benefits, coverage, exclusions, and premiums, or call (1-888-581-3124) for a leading business service, or go to our business services link.
  • Be sure the insurance company you are considering is financially stable.
  • Do not make any quick decisions. Request a copy of the policy and compare it with policies from different insurance companies.
  • Do not be fooled into thinking you need several policies for additional coverage. You only need one good policy.
  • Be sure your application is complete and accurate, including all of your medical history, if applicable.
  • Write a check, payable to the insurance company. Do not pay in cash.
  • After you receive your policy, reread it to be sure everything is correct. Your agent or company should explain any terms that are not clear.

Click on any specified insurance category for more information
Car Insurance
Health Insurance
Life Insurance
Homeowners Insurance
Renters Insurance

Car insurance can protect you if you are sued for injuring someone or damaging their property, or if your vehicle is damaged. And in most states, it's required by law.

  • Call at least three agents to ask for pricing.
  • Ask for proposals in writing.
  • Make sure you plan on sufficient liability coverage to protect your assets.
  • Consider whether you need secondary coverage, like emergency road service and rental reimbursement.
  • Tell the agent if your car is mortgaged or leased.
  • Make certain the agent inspects your car and verifies the odometer reading and vehicle identification number.
  • Know the value of your car.
  • Consider dropping collision and comprehensive coverage if your car has lost most of its value.
  • Choose the highest possible deductibles, if such coverage is necessary.
  • Ask about discounts for age, good driving history or insuring multiple vehicles with the same company.

    Nearly all states have compulsory auto insurance laws requiring drivers to carry public liability insurance.
    Only add coverage you do not already have through another source, such as an auto club.
    Carry sufficient liability to protect your personal assets.
  • Warnings:
    Do not misrepresent your driving record, or your insurer can declare the contract invalid and refuse to pay a loss.
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    Millions of people, smart people, are at a total loss when it comes to understanding the jargon of the health insurance industry. And without that understanding, choosing a good health plan is a shot in the dark. Basically, there are four ways to go. Before you start shopping for health plans, you need to understand one thing: coverage. Although the same condition - emergency care, let's say - is included in many plans' coverage, it doesn't mean that a plan pays for 100% of the cost of emergency care. Some plans cover 80% of the expenses incurred, others 50%. When you shop for health plans, what you're really shopping for is the kind of coverage that's most beneficial to you.

    INDEMNITY INSURANCE: (also called Fee-For-Service)
    This is the traditional insurance coverage you're probably familiar with. It pays for most of your health problems, but doesn't usually pay for preventive care like well-child visits and physical exams.

    Indemnity insurance doesn't cover the total cost. Coverage is usually limited to a percentage of the billed amount. Under an indemnity plan, you can see any doctor or hospital you want, but the monthly premium is usually higher than other types of health plans.

    HMO: Health Maintenance Organization
    An HMO covers most of your health care needs, including checkups, immunizations and hospitalization, for a small co-payment typically between $5 and $40. With an HMO there are no claim forms but you can only use doctors and hospitals affiliated with your plan. A list of affiliated physicians is provided by the HMO. An EPO (Exclusive Provider Organization) is a similar type of plan which functions in much the same way as an HMO.

    PPO: Preferred Provider Organization
    A PPO covers many of your health care needs for a small per-visit fee if you choose from the list of "preferred providers." You can choose to see a doctor who's not on the list, but you'll foot a greater part of the bill and may have to pay a deductible. Some PPOs do require claim forms.

    POS: Point of Service
    A POS plan gives you two different choices each time you use health care services: One choice is to use the plan just like an HMO, and you will be responsible for a nominal co-payment, for choosing physicians who are on the list and for obtaining authorizations for certain services and referrals to specialists. Your other choice is to use your health plan just like an indemnity plan by choosing care from either a participating provider or a non-participating provider, without coordinating care through your primary care physician or health plan. When using your health plan like indemnity insurance, you are generally responsible for a deductible and a percentage of your bill.

    The best time to join a health plan is before you need one
    Don't wait until you're sick to look for a health plan. Not only does it take time to find a plan you like, many plans have pre-existing condition exclusions, which could leave you out in the cold. Think ahead. Are you planning a family? Will you need surgery soon? Will you be moving out of the area?

    If you or your spouse is employed and want to change plans under your employer, ask about open enrollment. But don't wait until the last minute to start shopping around. Give yourself two months to do your homework for the best results.

    If your employer doesn't provide health insurance, you'll need to focus on health plans that offer insurance to individuals. You might also investigate associations that offer members the opportunity to join a health plan.

    Your health plan is as good as the physicians in it.
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    Once you have figured out how much life insurance you need, you are ready to consider the kind of policy to buy. There are many variations of what are really just two types of life insurance: term and permanent.

    Briefly, term insurance generally provides a death benefit only; coverage is for a contracted period, or term, usually for a specified number of years or to a specified age. The insurance company will pay your beneficiaries the death benefit of your policy only if you should die during the term.

    Because it is "no frills" insurance, term insurance generally gives the largest immediate death benefit for the lowest premium dollar, particularly for adults under age 40. After age 40, premiums begin to rise sharply.

    Permanent or "cash value" insurance combines a death benefit with cash value; part of your premium is diverted into a cash value element. The specified period of coverage is lengthy, usually up to age 90 or 100, but you can cancel your coverage and redeem at least part of your accumulated cash value any time before that. It may be possible to borrow or withdraw some of your cash value and still keep the policy in effect as long as the premiums are paid.
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    Your home is likely your most valuable possession. The time to think about the unthinkable disaster is before it happens to you. If your home were damaged or destroyed, insurance can help you repair or rebuild your home and replace damaged possessions.

    The main purpose of insurance is to protect you against losses you cannot afford. Few people have the financial resources to rebuild their homes. In addition to protecting your home and possessions, homeowners insurance also provides liability coverage to protect you from financial ruin if someone is injured on your property and sues for damages.

    This article explains the basic parts of a standard homeowners policy, including dwelling coverage, personal property coverage and liability insurance, optional coverages and endorsements, as well as flood and earthquake insurance. You will also find information on the factors that determine how much you pay for insurance and explain ways to reduce your premiums. You will understand what it means to be a wise consumer and buy the proper type of insurance in the right amounts to protect your home and possessions.

    A homeowners insurance policy is a contract between you and an insurance company. In exchange for the premium you pay, the insurance company agrees to cover home and property losses resulting from events that are outlined in the policy. Insurance pools the risks of many homeowners so that no one person has to bear the entire cost of a loss at a given time.

    A homeowners insurance policy consists of coverage for your dwelling and your personal property. It also includes liability insurance which pays for injuries to other people or damages to their property accidentally caused by you, your family or your pets. You also can buy several types of additional insurance for property that is not listed in your homeowners policy or for perils not covered — such as flood — for which you need a separate policy. You do this by either buying a separate policy or by adding an endorsement or rider to your policy.

    To get the best value for your insurance dollar, it is important to:

    • Buy enough of the right kind of insurance to protect your property.
    • Keep a record of your insured possessions, so you have accurate information to document your losses.
    • Compare policies and premiums before you buy.
    • Read your policy and understand what coverage is provided.
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    Renters often think insurance costs too much. But, $100 to $200 a year typically will buy $12,000 to $15,000 of replacement cost coverage for your personal belongings and $100,000 of liability insurance.

    Renters often assume their landlords’ insurance will protect them in case of fire or theft. Most landlords do carry insurance, but it does not cover renters’ possessions or liability.

    So, if your barbecue grill starts a fire that destroys your apartment building, you could be responsible for damages to the entire structure. In this instance, if the landlord has insurance, he or she would collect from the insurer. Then the insurer could sue you for the amount paid to the landlord. If the landlord were uninsured, he or she might sue you directly.

    Military Limits

    Even if you are an active-duty member of the armed forces, the government limits reimbursement for personal possessions that are stolen or damaged on government property. In addition, there is no coverage for any bodily injury you, family members, or your pets may accidentally cause. The government does not cover damage to your quarters for which you are held liable either.

    In these cases, the law treats military personnel the same as civilians, who must protect themselves from these causes of loss. In cases where damage is caused by simple negligence, your liability is normally limited to one month’s basic pay. If it’s determined that the loss was the result of willful misconduct or gross negligence, you could be held fully liable for the replacement value of your quarters or government-owned equipment, such as appliances. Make sure your renters policy liability coverage is adequate to cover this amount. The Housing Office on your base or post can provide replacement cost information.

    It’s Worth Protecting

    Many renters think they don’t own anything valuable enough to insure or that they could easily replace what they lose. But the average one-bedroom apartment — with a living room, kitchen and breakfast nook — could easily contain $21,000 to $33,000 or more worth of personal property. The value of your possessions may be higher or lower, depending on where you live and what you paid for them.
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