What is the best insurance company for you?

Shop around before buying a policy. Speak with several independent insurance brokers and exclusive company agents (insurance profession­als are either independent brokers who write policies for many insurers or exclusive agents who write policies for just one). Make sure that you are getting the coverage you really need at the lowest possible cost.

Remember there is more to picking a good insurer than price alone. You also need to investigate the company’s record for paying claims and its overall financial health. All the coverage in the world will not help you if your insurance company goes out of business or takes too long to pay its claims.

Remember, insurance companies do go out of business. Be sure to check out companies using these resources:

• A. M. Best:  www.ambest.com

• Moody’s:  www.moodys.com

• Insure.com:  www.insure.com

One more precaution: Examine all policies carefully to be sure they accurately describe the specific coverage that you discussed with the person who sold you the policy. To be protected, you need documenta­tion of your coverage, not verbal assurances.

 

Action Steps for Chapter Two

 

Ask whether you can lower your insurance premiums by adding a sprinkler system, a fire alarm, or other improvements to your property.

One way to minimize or reduce insurance costs in rental properties is to require all tenants to have in place their own renter’s insurance policies or business policies, if you own a retail or office building. You simply stipulate in leases the amount of coverage that you require all tenants to maintain, and add a clause stating that they will not hold you liable for loss of belongings. Be aware, however, that such clauses in leases may not prevent certain tenants from suing you in the aftermath of a fire or flood.

Before you buy a policy from an insurance agent, ask to see copies of the forms that you would have to fill out to file a claim.  Then ask the agent to explain the timetable that you would have to follow in order to get paid. How does that process feel to you? Try to imagine what it would be like to go through the claims process.

Examine all insurance policies to be sure they accurately describe the specific coverage that you discussed with the person who sold you the policy. To be protected, you need documentation of your coverage, not verbal assurances.

 

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