No one likes paying for insurance until you need it and for young professionals; getting insurance is a part of life. We work hard and want to protect the progress we’ve made. Unfortunately, choosing which insurance to get can be a bit overwhelming. All the words definitions, conditions, coverages, exclusions, and endorsements can be confusing, however, imagine losing everything you own to a fire and not having insurance to help get your life back on track? Losses are all to common and it’s not a matter of if, but when, so having insurance is essential and here are some tips on how to choose the right one.

Independent agent vs. insurance company

A little confused between the role of someone selling you insurance vs the insurance company? Typically, the job of the independent insurance agent is to find an insurance company that best fits your needs. The insurance company, however, determines the premium (your monthly amount due) by reviewing suggested coverages identified by your independent agent, mails you a copy of your insurance policy, handles your insurance payments, makes changes to your policy as recommended by your agent or because of a lifestyle change (i.e. marriage, kids, job change etc), and lastly it pays claims if you experience a loss (i.e. an accident).

Company Reputation and History

There are a ton of options for insurance today, and there seem to be more and more popping up. As with any big decision, research the companies you are interested in by visiting their websites. Have a look at how long they’ve been in business, where they sell their products, what their mission, vision, and values are, the company leadership, their community involvement, the types of products they sell and their financial strength. You probably won’t find a company with only positive reviews but if the information you see doesn’t answer all your questions or leaves you feeling not quite right about them, then research another insurance company. As with any other purchasing decision, you should be comfortable with your choice!

Understand the insurance company’s financial strength

The insurance company is really only good if they’re there for you in your time of need, i.e. a loss. The last thing you want to see is your insurance company in over their heads and not able to pay your claim. If there’s a problematic claim situation, you may need a public adjuster, as you don’t want to find that your insurance company can’t pay your claim because of bad financial standing. Most insurance companies work with independent rating agencies that review many factors and the financial results to assign a letter grade or score.

Coverage

Select an insurance company that provides the appropriate coverage for your personal or business needs. If you just need a basic coverage, perhaps consider a more general insurance company. Or perhaps you’ve got more specific needs (i.e. jet skis or horses), and so you may want to seek out an insurance company that specializes in what you’re looking for.

Price

Of course, price is going to be a major consideration when purchasing insurance. However, it shouldn’t be the only one. If there’s one thing I’ve learned in life, it’s that you get what you pay for! There are many reasons why pricing is different between insurance carriers, for example, a lower price may mean you have less coverage, but then less coverage means more money out of your pocket if a loss occurs. A lower rate may also mean that insurance carrier has entered a new market for them so it may not have the experience another insurer would. While doing research, examine your own financial situation to assess the level of coverage, deductible and premium that makes the most sense for you.

Ease of doing business

Find out how you can interact with an insurance company. Can you pay your bill online and report claims online? Is there 24/7 customer service and social media platforms? How can you make policy changes and where do you go to with your billing questions? Call them up and see how long it takes for them to answer? The last thing you want is to run into issues while trying to get the help you need in the event of a loss.

Available discounts

Many insurance companies offer discounts and if there’s one thing YMF hates, it’s paying more than I have to. Find out what discounts apply to your situation, for example, you could get discounts on protective devices, newer and updated homes, specialized construction materials or methods, financial stability, multi-car families, good students, and anti-lock brakes. Many also offer multi-product discounts, i.e. ‘bundle and save’. A little research online, or even asking the agent on the phone can save you some money!

Buying insurance is a fact of life, and it’s something we’ll likely always have with us. Be smart, do your research and find the insurance (and company) that’s right for you!

Disclosure: Some links are affiliate links that may earn me a commission. I am recommending these companies based on my research and/or experience and truly think you would benefit from them, regardless of any commission I may earn.