Whether by laziness, ignorance or fear, many people actually carry too much insurance – and pay more than they should.
“There is a big misconception out there that the more you pay, the better coverage you get,” says John Barrett, an independent health insurance broker in Pasadena, Calif. “That is false. People pay for a lot of bells and whistles they don’t need.”
Insurance experts offer these insights into how to adopt a policy of not paying too much for your policies.
Auto insurance
When it comes to car insurance, be sure to keep your coverage current. Loretta Worters, vice president of the Insurance Information Institute, suggests dropping collision insurance when the annual premium for the coverage is 10 percent or more of the car’s Kelly Blue Book value.
If you have roadside assistance through a program like AAA, make sure you’re not paying for duplicate coverage from your auto insurer.“If your car is more than 5 years old, you may be over-insured,” Worters says.
Keep in mind, however, that as long as the car is financed or leased, the holding company will require you to maintain collision coverage.
As for liability insurance, you might aim for your state’s minimum if you have few assets, says Philip Reed, senior consumer advice editor at automotive website Edmunds.com.
“If you’re young, single and rent an apartment, you can easily go with the minimums,” Reed says. “If you own your home or business and have deeper pockets, you might want something more comprehensive.”
Many people also over-estimate how many miles they drive per year – and could slash their auto insurance bills if they adjusted it to reality. To do so, calculate how many miles you’ve driven on the vehicle since you acquired it, then divide by the number of years you’ve owned it, Reed suggests. Also, consider any significant lifestyle changes that affect your mileage, such as switching to a job closer to home.
Most carriers offer roadside assistance as an add-on, which is redundant if you also pay for roadside assistance from AAA or another program. Similarly, some policies pay for a loaner car should an accident put yours in the repair shop – a perk you don’t need if the vehicle is under a warranty offering the same benefit.
When it comes to rental car insurance, most of the time there’s no reason to pay for most or all of what the rental company offers. Many credit cards provide free rental car insurance when you pay for the service with the card. And your personal collision and comprehensive insurance coverage applies to other vehicles you drive, including rentals.
“There are very few instances in which you need additional insurance when you rent a car,” Edmunds.com’s Reed says.
Health insurance
Health insurance broker Barrett says that most people need only a fraction of the health coverage they pay for – and that may be even more of an issue since passage of a federal mandate forbidding insurers from charging co-pays for preventive visits and procedures.
Young, healthy people who see a doctor only once or twice per year should stay away from plans that provide unlimited office visits, or those that offer generous prescription drug benefits. And maternity coverage for those unlikely to become pregnant? Steer clear. Barrett says maternity coverage boosts health care premiums by 40 percent to 60 percent.
You should question whether you have too much health insurance coverage, especially if you’re young and healthy.Worters, the Insurance Information Institute executive, says married couples who both have access to a group insurance plan should consolidate under one policy. “It is seldom worth the extra premium to have a secondary insurer,” she says.
Life insurance
The aim of life insurance coverage is not to anoint your family’s grief with a financial windfall, San Francisco financial planner Kristin Harad says. In fact, most young people without dependents don’t need life insurance at all.
“If you’re single, you might consider only a small amount of life insurance to cover funeral costs, but only if you want to eliminate that stress on your family,” Harad says.
For those with spouses, children or other dependents, it’s wise to create a list of items you want your life insurance to cover – such as paying off the mortgage or fully support a surviving spouse – and things you must cover, such as daily living expenses for your family. Then determine how much coverage you can afford. Somewhere between your wants, your needs and your budget lies the amount of life insurance you need, Harad says.
Be careful not spend on life insurance at the expense of saving for other, more likely emergencies.
“You want to take a holistic view of your situation, and consider the more realistic situations you might face like job loss, long-term disability or medical conditions,” Harad says. “If you just focus on term life insurance for catastrophic risk, you may be better served to use some of that money to build up your emergency fund so you can help your family more.”
Homeowner’s insurance
“When buying homeowner’s insurance, make sure you insure your home, not the land,” the Insurance Information Institute’s Worters says. “While your home and its contents are at risk from fire, theft, windstorms and other perils, the ground your home sits on is not.”
Buy homeowner’s insurance that covers the cost of rebuilding your home and replacing the contents — nothing more. Avoid the temptation to tweak your coverage to keep pace with fluctuations in the real estate market.
–Emma Johnson
View the original article here
Filed under insurance by on Jan 25th, 2011. Comment. 
As an insurance consumer, you may have insurance policy contracts for auto insurance, home or condo insurance, life insurance and health insurance. Each policy includes terms and conditions that define when and how much the insurance company will pay you for a covered loss.
Occasionally, you may not receive the payment you expect. And, when that “denial of coverage” extends to hundreds or thousands of consumers, some of those consumers may seek an attorney who will file a class action lawsuit.
For example, most auto insurance policies say the insurance company will pay to repair or replace your car after an accident. But, some policies state that the insurance company can use “aftermarket parts” or non-OEM parts – that is, parts that were not made by the Original Equipment Manufacturer. In the '90s there was considerable class action litigation over the issue of whether insurance companies had properly disclosed their intent to use aftermarket parts for repairs.
A class action is a specific type of lawsuit that joins together a group of people who collectively choose to make a claim against one person or party. In the case of insurance class actions, the issues have often been about how much will be paid to repair a car or whether deceptive practices were involved in selling a policy. The claims are often relatively small and not worth the cost of an individual lawsuit, but when consumers join together in a national lawsuit, the law firm representing the class seeks payment for everyone in the group.If you receive a notification that you are a potential member of a class, you usually have two choices. You can decide to let the class action attorney “represent” you, which basically means that you will be entitled to get whatever settlement is obtained for every other member of the class. Or, you can choose to “opt out” of the class and either represent yourself or hire an attorney to represent you.
Our advice about whether to join the class? It’s often not worth it to hire an attorney for a small auto insurance claim, but you should read the notice carefully, to determine whether you want to be bound by the results of the class action suit. But, if you have a larger amount in dispute, such as the payment from a life insurance settlement, it’s a good idea to consult an attorney before waiving your rights to proceed with your own lawsuit.As you can imagine, insurance companies and class action litigants have a lot at stake, so most auto insurance or other insurance class action lawsuits are settled before trial. If you receive notice of a settlement, you may need to provide proof that you are actually entitled to a payment of other type of settlement. It’s a good idea to keep copies of old auto insurance policies, in case you need to send a copy. And, even though life insurance is not often the subject of class action suits, be sure to keep your life insurance policies in a safe place and tell your family how to find it.
If you receive a monetary settlement from an auto insurance lawsuit, or from a lawsuit involving your home, health or life insurance, some portion of the payment may be taxable. For example, if an insurance company did not properly pay for the damage to your car and the cars of all the class action litigants, the additional amount paid would not be taxable, because you were originally entitled to that amount under the terms of your insurance policy. But, if you also received interest on the payment or some other monetary penalty was paid, those amounts may be taxable.How can you be sure whether to include a settlement amount on your tax forms? Wait to see if you receive a 1099 form from the insurance company that paid you. The amount shown on the tax form must be shown as income.
Looking for different information? Have questions or feedback? Please let us know.
Filed under insurance by on Dec 23rd, 2010. Comment.
Basic auto liability insurance policies are low-cost auto insurance policies with a minimum number of benefits. It is a contract between an insured person and the insurance company, in which the insured person pays a premium and the company, in turn, provides financial support within the limits of the policy.
Basic auto liability insurance policies consist of two types of benefits or coverage. They are coverage for bodily injury and property damage. Bodily injury liability provides protection from various claims and court cases that are filed against insured persons, in case the insured person is the cause of injury or death of another person. This type of coverage pays costs for the affected person or his relatives for the pain, suffering, and other hardships, and also for economic damages. This coverage is optional, as it can be selected if a person needs it.
In property damage liability, insured persons are protected from claims and court cases for the damage of property of another person as a result of accident. Property generally refers to the vehicle of another person. However, damage to lamp posts, fences, telephone poles, and buildings is also considered in property liability.
Basic auto liability insurance policies are affordable and simple. Once a policy is selected, a “Limitation on Lawsuit” option is obtained along with the policies. There are certain limitations on the lawsuit option. Legal action can be taken only if death occurs or the person is seriously injured with any one of the conditions such as displaced fracture, dismemberment, major disfigurement or scarring, loss of fetus, and also for other permanent injuries in which body parts cannot function normally.
Basic auto liability policies are risky and provide very less or sometimes even no protection for bodily injury. Two-wheel motorized vehicles and commercial autos are commonly insured using these basic auto liability insurance policies.
Auto Insurance Companies provides detailed information on Auto Insurance Companies, Types of Auto Insurance Companies, Top Auto Insurance Companies, Auto Insurance Company Ratings and more. Auto Insurance Companies is affiliated with Car Insurance Policies [http://www.web-carinsurance.com].
Filed under auto insurance price quote by on Jun 15th, 2010. Comment.