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Insurance advisor: The smartest five minutes you can spend on insurance

You’ve heard the commercials that say in 15 minutes you can save 15 percent on car insurance, but that doesn’t necessarily mean you have the right coverage for your situation. But how do you know that you have the right coverage?

With Insure.com’s Insurance Advisor and your current insurance coverage documents, you can quickly get an idea of the appropriate levels of coverage for the four major areas of insurance: auto, health, home and life insurance.

The Insurance Advisor can identify holes or weak areas in your insurance portfolio and even provide some areas where an adjustment in coverage may be able to save you money. Even if you don’t have insurance, our advisor tool can review your submitted assets and make recommendations. And though we recommend completing all four sections of the tool, you can fill out only the portions where you want evaluation.

In about five minutes, you’ll have a comprehensive view of your insurance needs that can provide you peace of mind or help align you with the correct coverages. You will receive a letter grade for each section of auto, health, home and life, and you’ll receive a letter grade for the overall health of your insurance portfolio.

Insure.com Consumer Analyst Penny Gusner recommends using the Insurance Advisor tool annually or anytime you have a major life event (such as a marriage, addition of a child, buy or sell a home, divorce or death in the family.) in order to protect your assets, your family and your quality of life.  

If you are unfamiliar with your policies or feel unsure about limits and the industry jargon used, Gusner recommends pulling up your accounts online in multiple tabs in your browser. That way, as you complete the Insurance Advisor tool, you have everything you need just a few clicks away to help ensure the most accurate report possible.

 

Reviewing your health insurance

Health insurance is made available to the consumer three ways: a partially subsidized plan offered through an employer, a plan purchased from an Affordable Care Act health plan exchange marketplace, or a plan purchased through an individual provider or independent market.

When shopping for a new plan or evaluating your current one, it’s important to understand the variety of plans available and how they work, so you can ensure your health needs are covered. It’s also helpful to review the common terms used in policies before evaluating your health insurance, such as copay, coinsurance and deductible.

This section of the Insurance Advisor reviews your current medical plan in comparison to your medical needs at this time. Refresh yourself on the types of health plans available with the information box below.

The most common types of health plans

  • HMO - HMO stands for health maintenance organization and known for its lower premiums and restricted network of doctors and hospitals. What you sacrifice in flexibility, you gain in lower upfront costs.
  • PPO - PPO stands for preferred-provider organization. Premiums and deductibles are usually much higher for a PPO compared to an HMO, but that comes with greater flexibility to choose your service providers and locations.
  • POS - POS stands for point of service plan and is the least common type of health plan. POS plans are a hybrid of PPO and HMOs, meaning the health care consumer gets to choose whether to use HMO or PPO services each time a provider is seen.
  • High-deductible - HDHP stands for high-deductible health plan, which is also sometimes called a CDHP (consumer driven health plan). While the deductible is high, a Heath Savings Account is attached to it where you (and/or your employer) will store funds to be used to cover medical expenses.
  • Catastrophic - A catastrophic plan protects you in worst-case scenarios only, like accidents or serious illnesses.

Gusner’s advice when it comes to health insurance? Take the time to work through different scenarios.

“Your cheapest option is nearly always workplace health insurance. Even then, if your partner also has health insurance through an employer, be sure to crunch the numbers to see if it’s more cost effective to be on one plan or if it’s cheaper to use each employer’s health insurance separately," she says. "This step is even more important when you have kids; the premiums for a family can vary by hundreds of dollars per year.”

 

 Calculate Your Score Now Using Our Health Insurance Advsior Tool 

 

Reviewing your life insurance

Life insurance is the only form of basic insurance that is not required by a lender or state or federal laws. For that reason, it’s often overlooked in the insurance portfolio, however, life insurance is crucial to help ensure the quality of life for your family in the event of your death at a time when you are a major financial contributor.

In our last section, the Insurance Advisor breaks down term and permanent life insurance, looking at your dependents’ needs and your final requests to strategize the best kind of policy and coverage levels to ensure your family’s quality of life.

Life insurance is meant to help pay off assets, provide funds for funeral expenses, provide your partner with a supplemented income for a certain amount of time, and even help fund education for any children you may have.

The type and amount of coverage that you should have is determined by your mortgage, debts, income and additional expenses, like childcare or education.

  • Term Life -  Provides death benefit protection without any savings, investment or cash-value components.Term life insurance is available for set periods of time such as 10, 15, 20 or 30 years. Term Life is a popular choice because of the significantly lower cost. However, if you outlive the policy, you may find yourself in a challenging situation to try to by another life insurance policy.
  • Permanent Life - Provides a death benefit and has a cash-value account. As the name implies, the policy does not have an expiration date for your coverage. Rates are significantly higher than term coverage

"One of the biggest mistakes you can make with regard to life insurance is not telling the beneficiary about the policy and how to access it," says Insure.com Managing Editor Michelle Megna. "Life insurance companies are under no obligation to reach out to beneficiaries. In fact, most often, the company isn’t even aware the policyholder has died, and it’s a family member who reports the death of a person to the insurance company."

Calculate Your Score Now Using Our Life Insurance Advsior Tool 

 

Reviewing your auto insurance

Auto insurance is a crowded and competitive market, and many companies claim to save you money. While the cost of the policy is important, it’s only one component of a great auto insurance policy. It’s helpful to consider claims processing, customer service, financial rating, as well as cost when reviewing your auto insurance. If you are in the market to shop for a new auto insurance policy, review Insure.com’s Best Auto Insurance Companies.

As you begin your insurance check-up, you will be asked for information on the make, model and year of your vehicle, along with a review of the basic components of auto insurance: liability limitscomprehensive & collisionuninsured motorist coverage and PIP or MedPay coverage.

"If you’re not ready to use the Insurance Advisor yet, there are some faithful rules you can follow when evaluating coverage on your own," explains Megna. “You can make some basic calculations to ensure you’re not paying for unnecessary coverages."

Auto insurance at a glance

Liability recommendations

If your net worth is:

  • less than $50,000, choose at least 50/100/50
  • between $50,000 and $100,000, choose at least 100/300/100
  • more than $100,000, choose at least 250/500/100

Collision coverage recommendations:

  • If your car is less than 10 years old, consider buying collision coverage to protect the value of the vehicle.
  • If your car is more than 10 years old, buy collision if your car is worth $3,000 or more.
  • Buy collision if you can’t afford to replace the vehicle in the event of a total loss from an accident.

Comprehensive coverage recommendations:

  • If your car is less than 10 years old, you should consider buying comprehensive.
  • If your car is more than 10 years old, buy comprehensive if your car is worth $3,000 or more.
  • Buy comprehensive if you live in a region prone to flooding, hail or animal strikes.

Calculate Your Score Now Using Our Auto Insurance Advisor Tool 

 

Reviewing your home insurance

Home insurance seems to fall to the bottom of the list for many home owners, who often have a “set-it-and-forget-it” mindset about theirhome policies. Since homeowners are often required to obtain a home policy when a home is purchased, the policy, generally, is quickly outdated with the addition of new furniture, a cutting-edge flatscreen TV, a laptop computer, or that upgraded kitchen remodel. Taking a  new nventory of your items is crucial to an up-to-date policy to protect the value of tour home and assets. Many companies even allow you to upload a video inventory — making the process as simple and painless as possible.

 

In this section, the Advisor tool will be looking at the basic components of home insurance, such as dwelling coverage, liability, personal property.

  • Dwelling refers to the amount needed to rebuild your home and replace the possessions inside.
  • Liability is the amount of coverage to cover the cost of damages that you or other people covered by your insurance policy are responsible for causing.
  • Personal property - Items or collections of items of particularly high value, usually over $2,500 are insured with a rider in your home insurance. Gun collections, antiques, jewelry, and heirlooms are just a few examples of items that might benefit from having a rider in place.

Gusner recommends buying enough dwelling coverage to rebuild or repair your home with equitable materials in today’s market and $300,000 or more in liability coverage.

“If someone suffers an injury on your property, they may have no other choice but to file a claim in order to pay their medical bills,” says Gusner. “A dog bite, a trip hazard, even food poisoning leaves you vulnerable to holding the bill for an injury that occurs on your property.”

It’s also preferable to select Replacement Cost instead of Actual Cost Value so if your items need to be replaced, you receive the dollar amount needed to buy the same or comparable item, rather than the value of the item at the time of loss.

Shop around yearly for home insurance when yours is up for renewal. Make sure to look into bundling your auto coverage with the same provider to see if the company can give you a good price on great coverages.

Calculate Your Score Now Using Our Home Insurance Advisor Tool

  

Get ready for your insurance check-up

When you’ve finished the four sections of the Insurance Advisor, you will have completed a comprehensive review of your auto, health, home and life insurance coverage.

“Our tool is an exceptional way to get a complete snapshot of your insurance portfolio. This process could easily take two hours with an in-person insurance advisor, but with this tool, the same guidance will take a fraction of the time. With this information, you’ll be prepared to have conversations with agents that can help you reduce costs, eliminate useless coverage and raise coverage as your net worth grows,” says Gusner.

After completing your assessment, if you find that you are now in the market to supplement or change your insurance, review the annual Best Insurance Companies to help steer you in the direction of the best companies as recommended by surveyed policyholders.

 

If the Insurance Advisor Tool helps you identify any gaps in your coverage or helps you understand your insurance needs, we want to hear about it. Tag us on Twitter @InsureCom or Facebook @Insure with the hashtag #Adultingmyinsurance