Employment Practice Insurance Helpful Advice and Useful Tips

• CONSIDER THIS
  One universally accepted rule of thumb goes like this: A young married couple with children should have insurance equal to five times their family income, plus the amount of the mortgage. They should also buy additional coverage for increased inflation. If both spouses work, coverage should be divided in proportion to their incomes. A more realistic approach when examining your family's future security, is to ensure you have enough capital to provide adequately for your family should you not be able to provide for them. However, many shrug even this basic question off.
• DETERMINING HOW MUCH INSURANCE TO BUY
  The first step in determining how much insurance protection to buy is to calculate the value of your home and personal property.
  Next, find out how much it would cost to replace your house and personal property. Your insurance agent or broker can help you by providing formulas or worksheets. Also, consider hiring a professional appraiser to calculate the replacement cost.
  
  When calculating any replacement cost keep in mind that what you spent to buy something will likely be very different from what it will cost to replace. For example, clothing and shoe costs have escalated dramatically over the years.
  
  It is recommended that you obtain at least three written estimates for comparable policies. A reasonable place to begin is with the insurance company with which you have had good results for your automobile, life or health insurance.
  
  You may also want to ask friends, neighbors, colleagues and relatives for recommendations for a reputable insurance company.
  
  In an effort to buy more cost-effectively, consider buying a long-term policy and avoid monthly or quarterly payments that frequently include finance charges.
  
  Additionally, consider choosing a policy with a high deductible. With these policies you pay for all small damages or claims up to the amount of the deductible, then the insurance company will cover amounts over the deductible.
  
  By waving the insurance company's responsibility to pay for the smaller claims you receive the benefit of coverage for major or catastrophic emergencies without having to pay the high costs associated with low deductibles. By raising the deductible, for example, you may save up to 50% of the cost of your homeowners insurance.
  
• Do homework
  Posing as ordinary buyers, investigators with the Pennsylvania Insurance Department once visited 186 insurance agencies in three cities. Of the 92 Philadelphia agents contacted, fewer than 30% volunteered information on discounts and deductibles that could have reduced premiums 20% to 40%. The lesson: Arm yourself with as much information as you can before you start calling companies. You'll find that some kinds of information are easier to get than others. It is fairly easy to solicit cost, coverage and deductible information from auto insurers; it's much more difficult to find out their financial stability and service record -- things you'd be interested in knowing if, for example, you get a good cost quote from a company you're not familiar with.
  
  You can check out stability in Best's Insurance Reports: Property-Casualty at your local library; insurers with the top two ratings can be considered solid. (You can also ask an agent how A.M Best, the rating service that publishes the above guide, rates his or her company.) Also contact your state insurance office; many of them keep track of consumer complaints and will share the results if they're asked. Most have Web sites. Finally, read through your policy carefully so that you're sure of the kind and amount of protection you have.
  
• Compare the premiums
  Survey after survey confirms that auto-insurance companies often charge greatly different premiums for the same coverage. In New York, Pennsylvania and elsewhere, premiums have been shown to vary sometimes by more than 100%. A shopping trip by the Arizona Department of Insurance in 1996 found six-month premiums for a 48-year-old Phoenix man driving a late-model car ranged from about $500 at one to company to more than $1,500 at another company, with others scattered somewhere in between.
  
  Rates may not vary as wildly in your area, but the odds are you will discover substantial differences if you take the time to get premium quotes from a number of companies. Begin with a market leader, such as State Farm or Allstate. Then use that quote as a measure against which to judge identical coverage at other companies.
  
  Many state insurance offices distribute auto-insurance pricing guides, but the categories they use may not match yours. Your best bet is to use such a guide to identify your state's most cost-effective insurers. Then get price quotes from a handful and you'll have a truly comparative guide
  
• Reduce the coverage on an old car
  You could consider dropping comprehensive and collision coverage on an old car to reduce your insurance costs fast. That would expose you to additional risk, but remember that the insurance company won't pay more to fix a car than it's worth. Each year's depreciation therefore diminishes the maximum claim you can make against your collision coverage. If your car is five or more years old, depending on its value, you may be better off dropping both collision and comprehensive coverage and banking the savings.
  
  Estimate your car's value by studying the classified ads or by consulting used-car price guides, and consider how much protection you're really buying for your collision and comprehensive premium
  
• Comparison shop
  Prices for the same coverage can vary by hundreds of dollars, so it pays to shop around. Ask your friends, check the yellow pages or call your state insurance department (phone numbers are on back page). You can also check consumer guides, insurance agents or companies. This will give you an idea of price ranges and tell you which companies or agents have the lowest prices. But don't shop price alone.
  
  The insurer you select should offer both fair prices and excellent service. Quality personal service may cost a bit more, but provides added conveniences, so talk to a number of insurers to get a feeling for the quality of their service. Ask them what they would do to lower your costs. Check the financial ratings of the companies too. Then, when you've narrowed the field to three insurers, get price quotes
  
• Drop collision and/or comprehensive coverage on older cars
  It may not be cost-effective to have collision or comprehensive coverage on cars worth less than $1000 because any claim you make would not substantially exceed annual cost and deductible amounts. Auto dealers and banks can tell you the worth of cars.
• Lower costs with higher deductibles
  Deductibles represent the amount of money you pay before you make a claim. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision cost by 15% to 30%.