Why You Need Insurance

First and foremost, insurance is about risk management. Consider these facts:

• Smart spending, regular savings and strategic investing are just part of smart financial management. It is vital to insure your assets, your earning potential, yourself, and your family against suffering a loss. This protection is called risk management.
• Effective risk management includes obtaining adequate insurance for you, your family, and your possessions. It could also include reducing your risk factors by purchasing vehicles with safety and anti-theft equipment, taking a defensive driving course, and installing smoke detectors and a security system in your home. These actions may also reduce your insurance premiums.
• Insurance can never repair the emotional damage a loss brings, but it can minimize your financial stress and help you preserve your personal financial resources if the worst happens.
• The military provides several benefits that resemble insurance. Experts recommend that you coordinate these benefits when considering any type of private insurance coverage.

Choosing an Insurance Company

Before purchasing insurance, carefully assess what you need to protect. Although important, the cost of insurance should not be the only factor used when making this decision. Determine the level of coverage required. Compare insurance companies and their policies. According to the Insurance Information Institute (III), consider these factors when selecting an insurance company:

• Consult consumer publications, A.M. Best Company reports (available in most libraries) and your state's department of insurance.
• Contact independent rating agencies for more information.
• Visit your state's department of insurance website to learn if a company is licensed in the state and covered by the state's guaranty fund, which may pay claims in the event the company defaults. Check with your state's insurance website to see if there are limits to coverage. Buying from a company licensed in your state means your state's department of insurance can help if there is a problem.
• Visit your state's department of insurance website to find out whether complaints have been filed against a particular company.
• Ask family friends and neighbors what they like or dislike about their insurers.
• Ask about discounts and savings but pay attention to overall price. A company that offers few discounts still may have lower premiums.
• Ask if an insurer reduces premiums if you buy more than one type of insurance.
• Choose a company that has a reputation for being responsive.
• Select a company that treats you courteously and fairly.

Note: This information provides general insurance descriptions. When planning to insure your family, contact an insurance company for precise information on coverages, limitations and conditions.