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Buying Insurance Overview

Whether you've just started looking into buying insurance, or you own multiple policies already, you've probably noticed that there's no shortage of insurance agents to sell you a policy. How, when, what type of policy, and where you can buy insurance varies depending on what type of insurance you seek.

Read on to learn more about the first steps toward obtaining insurance coverage.

Buying Insurance: Initial Considerations

There are a few things to consider when purchasing an insurance policy. Of course, the first question is, "What kind of insurance are you looking for?" With any type of coverage, you'll want to answer the following fundamental questions:

  • What is the monthly premium?
  • What does the policy cover?
  • What is the amount of coverage?
  • What are the policy limits?
  • What are the policy exclusions?
  • What period of time does the policy cover?

There are many types of insurance. The particular type of policy dictates what is acceptable for a policyholder in any given situation.

Health Insurance

Regarding good health care, having health insurance is critical for most people. Shopping for health insurance depends on what's available to you.

For example, you can obtain a health plan through your employer. When this is the case, using government insurance exchanges or marketplaces is unnecessary.

When your employer offers a health insurance plan, your employer pays a portion of the employees' insurance. This means marketplace coverage comes with higher premiums than an employer-sponsored policy. In such cases, you won't need to shop at a state or federal marketplace.

However, if your employer does not offer health insurance options, a state or federal marketplace may be the best option. The Affordable Care Act's health insurance program provides health coverage options.

Insurance for Homeowners and Renters

If you're about to buy a house, you'll need to consider several types of insurance, including the following:

Homeowners need to consider insurance to protect assets, but so do renters. If you're a renter, there's insurance designed for you. A renter's insurance policy can cover property damage, including vandalism. You'll need renter's insurance because the landlord's policy probably does not cover your personal property.

Auto Insurance

Concerning auto insurance, plenty of insurance brokers would be happy to sell you a car insurance policy. Drivers need liability coverage. Liability insurance covers damage or injuries to other people.

Collision insurance covers damage to your car when you're at fault for an accident. A policy does not include all types of coverage. It's essential to examine your options closely.

With car insurance, an insurance company bases your insurance rates on several factors. These factors can include your:

  • Age
  • Location
  • Driving record
  • Type of vehicle

A licensed insurance agent can help you understand the fine print of an insurance policy.

Life Insurance Policies

In general, death benefits are more affordable when you're younger. Life insurance companies consider your age and health, among other factors, before issuing a policy.

Common types of life insurance policies include the following:

  • Term life insurance
  • Whole life insurance
  • Variable life insurance

You should consider purchasing a life insurance policy if you have dependents who rely on you for financial support. With life insurance, you name beneficiaries who will receive the proceeds from the policy.

When To Buy Insurance

You must buy insurance before the event that you're insuring against happens. No company will sell you car insurance to cover an accident that has already occurred, so you should purchase automobile insurance when you buy a car.

In fact, you're required to purchase auto insurance. Home insurance is necessary when you purchase a home. Most lenders make this mandatory. You should buy business insurance if you run your own business.

Some types of insurance have specific windows for purchasing a policy. The most notable kind is health insurance. Generally, you must obtain health insurance during open enrollment periods unless you qualify for a special enrollment period because of a significant life event, such as marriage or the birth of a child, or if you qualify for Medicaid or Medicare.

Where To Buy Insurance

When buying insurance, it's important to research several companies to find the right fit and avoid trouble. You can ask friends and family for recommendations. Additional considerations include the following:

  • Check the volume of consumer complaints lodged against the company with your state's insurance department.
  • Evaluate the company's financial stability. Review relevant reports compiled by organizations like Moody's and Standard and Poor's. You don't want your insurance company to fold in 10 years just as you're preparing to file a claim.
  • Ensure the company is licensed in your state or the state to which you're moving.
  • Get quotes from multiple companies. Ask if they have any discounts. For example, you can often save money by purchasing multiple insurance policies from the same company. Also, signing up for a higher deductible usually translates to lower premiums.
  • Some experts recommend using an agent or broker who represents multiple companies. This can boost your odds of getting the best deal and coverage for your situation.

Finding the right insurance company can be difficult. It's possible to end up with an agent or company that fails to abide by your state's laws regarding:

  • Marketing
  • Underwriting
  • Fraud

If that's the case, you may be able to file any of the following:

An attorney can explain your legal options.

Having Insurance Issues? Speak with an Experienced Attorney

Buying insurance involves research and careful consideration of your insurance needs. Once you have insurance, knowing what's covered can be difficult. If your insurer denied your claim, or you're dealing with an insurance company that engaged in misleading sales tactics or other misconduct, contact a local insurance attorney who can help protect your rights.

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Next Steps

Contact a qualified attorney to assist with any issues related to insurance.

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