20 Questions To Ask Before Purchasing Insurance

Safeguarding your financial future is protecting what matters and is no doubt a paramount consideration for anyone seeking insurance coverage. With an array of insurance options available, making the right decision can feel overwhelming as you can agree the devil is in the details. From understanding policy inclusions to grasping the nuances of coverage limits and That’s why we’ve compiled a concise yet comprehensive list of 20 essential questions to ask before purchasing insurance, ensuring you have all the information needed to make confident and informed choices.

So, lets get to it;

1. What types of insurance do I need? (e.g., auto insurance, home insurance, life insurance, health insurance, etc.)
2. How much coverage do I need for each type of insurance?
3. What are the specific policy benefits and inclusions for each type of insurance?
4. What are the exclusions or limitations of the insurance policies?
5. What factors will influence the insurance premium? (e.g., age, location, driving history, health condition, etc.)
6. How can I save money on insurance without compromising coverage?
7. Are there any discounts or promotions available for the insurance policies I’m interested in?
8. How do deductibles work, and how will they affect my premium and claims?
9. What is the claims process like? How quickly can I expect to receive compensation if I file a claim?
10. Are there any waiting periods for specific types of coverage, such as pre-existing conditions in health insurance?
11. Can I customize my insurance coverage to suit my specific needs?
12. Are there any additional riders or endorsements that I can add to my policies for enhanced coverage?
13. How financially stable is the insurance company? Can I trust them to pay claims promptly?
14. What reviews and ratings does the insurance company have from customers and independent rating agencies?
15. How accessible is customer support, and what are the available communication channels?
16. Can I transfer my insurance coverage if I move to a different location or change my vehicle?
17. Will my premiums increase over time, and if so, what factors could cause those increases?
18. How long is the policy term, and are there options for renewing or canceling the policy?
19. What are the consequences of missed payments or policy lapses?
20. How can I lower my insurance risk and potentially reduce my premiums?

You sure would like to hear the answers to these questions so lets get you all the answers. Some of the answers can be provided simply by enquiring from the insurance company.

1. What types of insurance do I need?
   • The types of insurance you might need will depend on your specific circumstances. Common types include auto-insurance, home insurance for property coverage, life insurance for financial security to beneficiaries, and health insurance for medical expenses. Additionally, consider disability insurance for income protection, and liability insurance for legal defense and claims coverage.
2. How much coverage do I need for each type of insurance?
   • The ideal coverage varies based on your needs. For auto insurance, consider liability, collision, and comprehensive coverage keeping in mind the value of your car. Home insurance should cover the property’s replacement cost, liability protection but not improvement cost.However, there are some exceptions to this rule. Some insurance companies may offer limited coverage for specific home improvements, especially if they increase the overall value of the property or improve its safety features. For example, if you install a new security system, your insurance company might offer a discount on your premium. For Life insurance, the primary coverage of a life insurance policy is the death benefit. This is the amount of money that is paid to the beneficiaries upon the death of the insured. Others will include Term Life Insurance Coverage, Universal Life Insurance Coverage, Whole Life Insurance Coverage, Endowment Policies(provide a death benefit to beneficiaries if the insured passes away during the policy term). Health insurance should meet your medical needs and budget.
3. What are the specific policy benefits and inclusions for each type of insurance?
   • Different Insurance companies have policy benefits so here’s an advice on what to look out for. For auto insurance, look for accident forgiveness, roadside assistance, and rental car coverage. For Home insurance, look out for coverage for fire, theft, natural disasters, and liability.
     For Life insurance policies look out for details on the death benefit and any additional riders. Health insurance should list covered services, prescription coverage, and deductible amounts as should other insurance types too.
4. What are the exclusions or limitations of the insurance policies?
   • Insurance policies have exclusions and limitations to prevent fraud and manage risks. Read the policy documents carefully to understand what is not covered, such as intentional acts or pre-existing conditions.
5. What factors will influence the insurance premium?
   • Insurance premiums are determined by various factors, including age, location, driving record, credit score (for some policies), coverage limits, deductible choices, the value of insured assets, and the type of coverage required.
6. How can I save money on insurance without compromising coverage?
   • To save money, consider bundling policies with the same insurer, raising deductibles (if financially feasible), maintaining a good credit score, qualifying for discounts (e.g., safe driver, multi-policy), and comparing quotes from different insurers. Also speak with experts on matters like these and do research where necessary.
7. Are there usually discounts available for the insurance policies?
   
   Many insurers offer discounts and promotions. Inquire about the following;
   • Multi-Policy Discount: Bundling multiple insurance policies, such as home and auto insurance, with the same insurer can lead to significant discounts on both policies.
   • Safe Driver Discount: Maintaining a clean driving record, without accidents or traffic violations, often qualifies you for a lower premium on auto insurance.
   • Good Student Discount: Students who achieve good grades in school may be eligible for reduced rates on auto insurance.
   • Home Safety Features Discount: Installing safety features in your home, like smoke detectors, security systems, or impact-resistant roofing, can lead to lower homeowners insurance premiums.
   • Claims-Free Discount: If you haven’t filed any claims within a specific period, you may qualify for a discount on your insurance premiums.
   • Defensive Driving Course Discount: Completing an approved defensive driving course can result in a discount on auto insurance.
   • Paid-in-Full Discount: Paying your annual premium in full upfront can lead to a discount on your insurance policy.
   • Non-Smoker Discount: Being a non-smoker may make you eligible for discounts on life insurance or health insurance.
   • Loyalty Discount: Some insurers offer discounts to long-term customers who renew their policies with them.
   • Green Vehicle Discount: Owning a hybrid or electric vehicle may lead to a discount on auto insurance.
   • Membership Discounts: Some insurance companies offer discounts to members of certain organizations or professional groups.
   • Age-Based Discounts: Young drivers and senior citizens may qualify for age-specific discounts on auto insurance.
   • Home Renovation Discount: If you’ve recently made home improvements or renovations, you may be eligible for a discount on homeowners insurance.
   • New Home Discount: Purchasing a new home may make you eligible for reduced rates on homeowners insurance.
   • Low Mileage Discount: If you drive fewer miles than the average driver, you may qualify for a discount on auto insurance.
8. How do deductibles work, and how will they affect my premium and claims?
   • A deductible is the amount you pay out-of-pocket before insurance coverage kicks in. Higher deductibles typically lead to lower premiums but may require you to pay more upfront in case of a claim.
9. What is the claims process like? How quickly can I expect to receive compensation if I file a claim?
   • The claims process varies among insurers. Ask about the required documentation, how to file a claim, and the typical time frame for claim resolution. you can also do personal research on each insurance company you come across to know how long their claim process takes. Click here if you need more information to that regard.
10. Are there any waiting periods for specific types of coverage, such as pre-existing conditions in health insurance?

• Some insurance policies have waiting periods before certain coverage becomes effective. For example, health insurance might have a waiting period for pre-existing conditions.

11. Can I customize my insurance coverage to suit my specific needs?

• Many insurers offer customizable policies to cater to individual needs. You can often adjust coverage levels and add optional riders or endorsements.

12. Are there any additional riders or endorsements that I can add to my policies for enhanced coverage?

• Riders and endorsements are optional add-ons that provide additional coverage. For example, adding a rental car rider to an auto insurance policy can cover rental vehicle expenses during repairs.

13. How financially stable is the insurance company? Can I trust them to pay claims promptly?

• Check the insurer’s financial strength and ratings from reputable rating agencies like A.M. Best(news publisher and data analytics provider specializing in the insurance industry), Standard & Poor’s(A Credit Rating Agency), or Moody’s. A financially stable company is more likely to handle claims promptly.

14. What reviews and ratings does the insurance company have from customers and independent rating agencies?

• Research customer reviews and independent ratings to find clear your doubts. Trustpilot, Better Business Bureau (BBB), Clearsurance are all tools that can be leveraged to this regard.

15. How accessible is customer support, and what are the available communication channels?

• Check the insurer’s customer support availability and the channels you can use to reach them. However generally, ways to reach your insurer can be via phone, email, online chat or visiting their office physically. You’ll find their address on their webpage under the “contact us” tab or at the footer of the Homepage,).

16. Can I transfer my insurance coverage if I move to a different location or change my vehicle?

• In many cases, insurance coverage can be transferred to a new location or a different vehicle. Notify your insurer of any changes promptly.

17. Will my premiums increase over time, and if so, what factors could cause those increases?

• Premiums may increase due to factors like inflation, changes in coverage, claims history, or external factors affecting insurance costs.

18. How long is the policy term, and are there options for renewing or canceling the policy?

• These are one of the questions you should ask your insurance company as policy terms vary by insurer and type of insurance. Inquire about renewal options and the process for canceling policies.

19. What are the consequences of missed payments or policy lapses?

• Missed payments can lead to the following Loss of Coverage, Reinstatement Challenges, Higher Premiums, Loss of Policy Benefits, Risk of Non-Renewal, Credit Score Impact, Coverage Gaps.

20. How can I lower my insurance risk and potentially reduce my premiums?

• Take measures to reduce risks, like installing safety devices for your car or home, maintaining a good credit score, and practicing safe driving habits. Some insurers offer discounts for these risk-reducing behaviors.

Remember that when purchasing insurance, clear and detailed communication with the insurer is crucial. Ask any specific questions related to your unique situation and thoroughly review policy documents to understand the coverage and terms.