Louisiana Department of Insurance

Released: May 19, 2010

In today�s challenging economic environment and with mounting questions about the implications of the newly passed health care bill, it has never been more important for consumers to understand their insurance options.

However, a new survey by the National Association of Insurance Commissioners (NAIC) tells a different story. In a ten question IQ quiz to test the nation�s insurance knowledge, on average, Americans flunked the test with only a 40 percent score. Not surprising is the fact that 86 percent of respondents said they do not understand all of the terms being used in the current discussion on health care reform.

�By arming yourself with the facts and improving your insurance IQ, you can make sure you are adequately protected, without paying more than you should for that coverage,� says Louisiana Insurance Commissioner Jim Donelon. �The Louisiana Department of Insurance offers the following tips on how you may be able to cut back on the cost of your insurance and make the best decisions for you and your family.�

Auto Insurance

Several factors can affect your auto insurance premiums. Some of these to keep in mind include: vehicle make and model, vehicle safety features, your age, gender, marital status, income, annual mileage, mileage to work, coverage limits, driving record, claim history, and territory.
Ask your insurance producer about discounts such as a multi-car discount, good grade discounts for students under 25 years of age, and mature driver discounts for consumers between 50 and 65 years of age. Teens can often receive a discount for completing a driver�s education course and many companies offer discounts to anyone who completes a defensive driving course.
Check with your producer about the pros and cons of higher deductibles. With a higher deductible you will be responsible for more of the cost to repair damages caused in an accident, but you will pay a lower premium.
Maintain a good driving record. Some companies offer discounts to drivers who have three or more years without an accident or moving violation.
Maintain a good credit history. Your credit score can have a direct impact on auto premiums.
Ask your producer if your company offers discounts for equipping your car with safety features, such as anti-theft devices, anti-lock brakes and automatic seat belts.
Not every company charges the same rates for coverage. Shop around and compare rates from at least three different companies for the best coverage at the best price.
Some companies are beginning to charge for auto insurance based on various criteria such as miles driven, speed and other driving habits. These kinds of policies require a monitoring device to be installed in the vehicle. If you drive minimal miles each month and have good driving habits, you should look into this type of policy.

Homeowners Insurance

Install protective devices � such as a burglar alarm system, smoke detectors and deadbolt locks. Notify your insurance producer if you have these devices or have recently installed them.
Consider consolidating your homeowners and auto insurance policies with the same insurer, as you might be eligible for a multiple-policy discount. However, be careful of switching your homeowners insurance if you have been with your company for three years or more, as by Louisiana law your company cannot cancel you or change your coverage or premium without due cause.
Again, maintain a good credit history. Many insurance companies consider credit history when determining how much to charge for homeowners insurance.
Proper maintenance and upkeep of your home can also save you money in the long-run.
You can receive insurance premium discounts if you build or retrofit your home to comply with the Louisiana State Uniform Construction Code, or install mitigation improvements demonstrated to reduce the amount of loss from a windstorm or hurricane.

Health Insurance

While there are many changes coming in the health insurance marketplace, there are no provisions in the Patient Protection and Affordable Care Act of 2009 (PPACA) that require consumers to make immediate modifications to their health insurance. Many of the initial changes will go into effect in September of this year. For a list of changes included in the PPACA and when they will go into effect, visit the NAIC Health and Managed Care Committee web page at www.naic.org/committees_b and look at the PPACA charts.
If you have been offered a policy that is a �limited-time offer,� has limited benefits or is advertised as necessitated by health care reform, you need to STOP before signing anything or making a payment, CALL the Louisiana Department of Insurance at 1-800-342-5900 and CONFIRM that the policy, agent and company are legitimate.
If you have a group policy with your employer, use the open enrollment period to find out if there are any provider options that may be less expensive than your current provider.
Stay in-network when possible, making sure to get referrals and pre-certifications as required by your plan.
Keep all receipts for medical services and expenses. In the event you exceed your deductibles, you might qualify for a tax deduction for out-of-pocket medical expenses.
Maintain a healthy lifestyle. Some insurers take your lifestyle into consideration when determining premiums. You may be able to reduce the cost of coverage if you quit smoking, drive more safely and maintain a healthy weight.

Life Insurance

Stay healthy or get healthy. Insurance companies might review your health habits and will consider certain behaviors, like smoking or excessive drinking, when determining your premiums.
Avoid risky behaviors. Dangerous hobbies, such as skydiving, hang-gliding or rock climbing, will likely cause higher insurance premiums. If you are an international traveler, your rates will be higher as well.
Maintaining a good driving record may cause your life insurance company to give lower rates because you wouldn�t be considered as much of a risk for life insurance as would someone with a bad driving record. This varies company by company and is something to ask your life insurer about.
Purchase life insurance at a young age when you are usually healthier and the rates will be more affordable.

Visit the Department of Insurance web site, www.ldi.state.la.us, and click on the �Test Your IQ� button to test your insurance knowledge. The Department web site is a great source for insurance information. A consumer publication section is found by clicking on �Publications, Guides and Forms� near the top of the screen. There you will find information on all types of insurance including auto, homeowners, individual health, life insurance, fixed deferred annuities and storm mitigation incentives. You can also compare rates of different companies by accessing our auto, homeowners and long-term care rate comparison guides.

If you have any insurance questions or concerns, you can reach any of our consumer affairs divisions toll free at 1-800-259-5300.