Commissioner Donelon Encourages Insurance Policy Spring Cleaning For Financial Savings and Better Understanding of Your Insurance Options
In today’s challenging economic environment it has never been more important for consumers to understand their insurance options. Spring is the perfect time to carefully review all your insurance policies and insurance options to make sure you have all the coverage you need and in the right amounts.
In dealing with all types of insurance, it’s a good idea to shop around. Look for the best coverage and service at the best price. The National Association of Insurance Commissioners (NAIC) has company complaint information on its website www.naic.org, and customer satisfaction ratings are available from Consumer Reports.
• 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. There are also discounts for people who work for certain companies or are members of certain organizations. Check with your producer to make sure you aren’t missing out on any discount opportunities.
• 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.
• Avoid extra fees in your policies. Don’t pay for rental car coverage if you don’t plan to use it or pay for roadside assistance if you already have it available from another source. Also, if you can pay your premium upfront, you can save on fees that are usually charged for monthly or quarterly payment options.
• Maintain a good driving record. Some companies offer discounts to drivers who have gone 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. Auto insurance companies use your credit rating because it tells them how likely you are to pay your premiums on time.
• 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. Also let your producer know if your vehicle has airbags and daytime running lights.
• Some companies are beginning to charge for auto insurance based on various criteria such as miles driven, speed and other driving habits. Some 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.
•Violations and accidents eventually expire over time, and when they do your rates may decrease. So keep tabs on these items to ensure they are removed in a timely manner.
•Know what is covered and what isn’t. Most homeowners insurance policies cover fire, theft, wind damage and explosion. Damage from floods, landslides and earthquakes are generally not covered and therefor require separate policies.
•Install protective devices — such as a burglar alarm system, smoke detectors and deadbolt locks. Notify your insurance producer if you have any of these devices.
• 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.
• Get an appraisal of your home’s value to make sure you are adequately covered. It is a good idea to insure your home for 100 percent of the replacement cost.
• 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.
• Create a home inventory to make sure you know what you own and what it’s worth before you need to make a claim. The NAIC has a free iPhone application for home inventory that lets you photograph and capture images, descriptions, bar codes and serial numbers, and then stores them electronically for safekeeping. The app, myHOME Scr.app.book, organizes information room by room and creates a back-up file for e-mail sharing.
•Consider Loss of Use insurance to cover rent or hotel fees in the event your home is uninhabitable after a catastrophe. At least one year of coverage is recommended.
• 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 1-800-259-5300 and CONFIRM that the policy, company and producer 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.
• 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.
The Department of Insurance website, www.ldi.la.gov, is a great source for insurance information. A consumer publication section is found by clicking on “Media” 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.