When buying home, health, auto or rental insurance, you should find out if your state insurance department offers any information about insurance companies and rates. Check several sources for the best rate and get quotes online. Consult an independent insurance agent who represents several insurers in your area to get a better deal.
Before purchasing insurance, be sure the insurance company is licensed and covered by the state’s guaranty fund. The fund pays claims if the company defaults. Your state insurance department can provide this information.
Research the complaint record of the company. Contact your state insurance department, or visit the website of the National Association of Insurance Commissioners (www.naic.org), which maintains a database of complaints filed with state regulators. Finally check the financial stability of the insurance company.
For additional information and guidance visit the following websites:
http://www.ambest.com, http://www.standardandpoors.com, and http://www.moodys.com
Discussion Questions
- Why is it important to contact state insurance department before purchasing insurance?
- How can an independent insurance agent provide a better insurance rate?
- Why is an insurance company’s financial stability important?
Teaching Suggestions
You may want to use the information in this blog post and the websites to
* Have students visit the various websites in this blog and then prepare a short summary of their findings.
* explore a few advantages of purchasing insurance from an independent insurance agent?
Melissa Hart
Focus on Personal Finance, 7e 