INSURANCE CENTER: Basics

Is price all that matters?

Insurance Basics
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Nope. Remember, you buy insurance for times of need. You may hate to make the payments, but imagine how angry you'll be if, after making all the payments, you can't get anywhere on a claim. There are three key issues beyond price.

First, make insurance bets with healthy companies. A.M. Best and Standard & Poor's company financial ratings are the standard. This is particularly important when establishing a long-term relationship, as with life, disability, or long-term care policies. Even if you're buying a term life policy of short duration, you want any guaranteed renewability and convertibility promises to last indefinitely.

Second, you want top-drawer claims service. Low premiums is just the input side of the equation. If the output side is stingy and adversarial, low premiums can be worse than no premiums.

Insure.com is a good place to check complaint and lawsuit records for specific companies, as well as current news on industry disputes. Some state insurance sites provide useful company data. Texas may have the most consumer-friendly state site, with company information that could be of interest to non-Texans as well.

The third key to consider, beyond price, is actually about price (make sense?) and convenience. Many insurance companies will give you a great deal on premiums if you buy multiple policies from them. Also, when it comes to agents, premium payments, and company red tape, there are advantages to keeping things simple. If you've had good experiences with a particular company or if your search unearths a few companies that could cover the whole ball o' wax for you, be sure to check for multiple policy discounts and compare quotes accordingly.