Finding adequate insurance coverage at a price you can afford is important. There are several items to keep in mind when buying almost any type of insurance.
- Shop Around. Insurance premiums can vary substantially from company to company so it usually pays to check with several companies before making a final choice.
- See Selecting an Agent or Insurance Company below.
- Never pay cash. Payment by check provides proof of payment and allows you to stop payment if necessary. Always make the check payable to the insurance company. Avoid making the check payable to the agent.
- Don't feel pressured into making a decision on the spot. Any insurance policy available today will still be available tomorrow.
- Know what insurance benefits you already have before you consider buying additional policies. You may have the same coverage in a current policy. Be sure to understand the costs, benefits and conditions associated with each policy, as well as risks associated with a change.
- Do not assume that the policy premium quoted will be the actual premium of the policy or that the policy will even be approved for coverage. Premium quotations are based on the information provided at the time. If the insurance company finds any of the information provided to be incorrect or develops some additional information, the original premium quoted may change or the company may even refuse to issue a policy.
- When changing insurance companies do not cancel your existing insurance policy until you are assured of the price and that you have been accepted by the new insurance company. When a policy first becomes effective, the insurance company may cancel that policy any time within the first 60 days without providing you with a reason for the cancellation. The cancellation is not effective until at least ten days after the insurance company mails or delivers to you a written notice of cancellation.
- Make sure you read and understand what you are signing. When answering questions on an application for insurance, your answers should be accurate, truthful and recorded as you stated. You are responsible for information that bears your signature. Your policy could be declared void if information is misrepresented.
- When you receive your policy, read the policy carefully, particularly any sections relating to exclusions and limitations. The time to understand your policy is before you have to make a claim. If you do not understand something in your policy or have additional questions, contact your agent.
For the most part, insurance is sold directly through an insurance company or through an agent or broker. An independent agent may represent more than one, and sometimes several insurance companies. An exclusive or captive agent sells solely for one insurance company or group of related insurance companies. Independent agents, as well as exclusive agents, may place business with another insurance company if the insurance company(s) he or she represents does not write the type of insurance needed. A broker represents you in your dealings with an insurance company.
In buying insurance, price is certainly a big consideration. But your insurance agent also performs an important role. An agent makes sure that the insurance is up-to-date, reflecting the actual values of the business, such as additional or replacement equipment, new structure or expanded operations. It is important to discuss with your agent, at least once a year, any changes that have occurred during the year, any increases in values, and increases in payroll and receipts.
An agent can offer advice on the amount and types of business insurance you need. You may need to work with several agents to make sure that you are getting the needed coverage at the best available price.
When you first talk to an agent, be sure that he or she is willing and able to explain various policies and other insurance-related matters. An agent should look for ways to get you the most protection at an affordable cost. Make certain that your agent agrees to review your coverage from time to time, advises you about other financial services, and assists you when problems develop.
Many people are interested in selling package products or services to as many people as possible. While there is nothing wrong with low cost, standardized products, they should fit your needs. If you are not convinced that a particular agent understands your needs and will give you the service you want, seek another agent. Agents and companies differ. Check with friends and relatives for recommendations. Agents and companies are listed alphabetically and by location in the yellow pages of the telephone book.
All companies and agents doing business in Wisconsin are licensed by the OCI. To find out if an agent or company is licensed call 1-800-236-8517. Licensing information about agents and companies can also be found on OCI's home page under "How do I? Search for . . ." An agent/agency (https://sbs-wi.naic.org/Lion-Web/jsp/sbsreports/AgentLookup.jsp) and A company (https://sbs-wi.naic.org/Lion-Web/jsp/sbsreports/CompanySearchLookup.jsp).
Buying Insurance on the Internet
As insurance companies expand their businesses online, consumers need to be aware of ways they can protect themselves when buying insurance on the Internet. Shopping for insurance does not change simply because you are on the Internet. OCI publishes a fact sheet that gives tips for buying insurance on the Internet. For more information on buying insurance on the Internet, call the OCI at 1-800-236-8517 and request a copy of Tips for Buying Insurance on the Internet. A copy is also available on the OCI's Web site at http://oci.wi.gov/pub_list/pi-220.htm.
For Your Protection
Information is available to consumers from a number of sources. These sources include public libraries, state insurance departments, consumer groups, and consumer publications. Financial strength and being able to meet financial obligations to policyholders is very important.
Independent organizations such as A. M. Best, Standard & Poor's, Moody's Investors Service, and others publish financial ratings. These rating organizations do not rate the quality of the company's policies, practices, agents, or service. You should consider checking with at least two organizations to evaluate a company's strength. If you want to check on an insurance company's financial stability, you can check the reference section of your public library for published ratings, call the OCI at 1-800-236-8517 or (608) 266-0103 (in Madison), or check with your insurance agent.