Insurance regulators urge Americans to 'get smart' about coverage

Posted: Friday, January 17, 2003

NEW YORK (AP) -- Does your family have enough life insurance? Are you paying the best possible rate for your car insurance? Would damage to your house and property be fully covered in a fire or a flood?

These are some of the questions the National Association of Insurance Commissioners would like you to ask yourself during its annual ''Get Smart About Insurance'' week Jan. 20-24.

NAIC is made up of regulatory officials from all 50 states, Washington, D.C., and the territories of Puerto Rico, Guam, American Samoa and the Virgin Islands.

The goal, said NAIC president Mike Pickens, is to raise public awareness about the importance of all forms of insurance.

''We're a neutral organization, and we want consumers to know that their state insurance departments are there to help them and to protect them,'' said Pickens, who also is the commissioner of Insurance in Arkansas.

To that end, NAIC has set up a special call center at 1-866-SMARTWEEK where consumers can order a free brochure to guide them through a review of their insurance coverage.

The brochure also is available at the association's Web site, The site has special tip sheets on buying life, auto, homeowners and long-term care policies as well as links to member states' sites.

The states license insurance companies and agents, so their Web sites are a good place to start if you want to check out the credentials of someone you're thinking of buying insurance from, Pickens said. The state pages also are the place to go to file complaints, he added.

Pickens urges consumers to take advantage of the NAIC campaign to get in the habit of doing an annual insurance checkup.

''I always tell consumer groups, 'We'll do everything we can do to protect you, but no state or federal agency can protect you as well as you can protect yourself,''' he said. ''Knowledge is your best protection.''

He recommends that if families already have a trusted insurance agent, they should sit down together ''and review what coverage they've got and, if circumstances have changed, what they need to add or subtract.''

He also advises that consumers should always shop around for the best deal.

''Just because you've been with a company for 10 years doesn't mean you're getting the best coverage or the best price,'' Pickens said.

How much coverage do you need?

When it comes to life insurance, NAIC recommends five to 10 times your annual income. For property, insurance should cover at least 80 percent of its replacement value, the association says.

Consumers can ''dig for discounts'' on a variety of policies:

-- When it comes to auto insurance, many companies will offer discounts to drivers who haven't made an insurance claim, been in an accident or been fined for a moving traffic violation in three years. There also are reduced prices for young drivers who have taken driver's education classes or who get good grades.

-- Property insurers sometimes will lower premiums if a homeowner installs safety devices such as alarm systems or fire extinguishers.

-- It can also pay to double up, because some insurers give discounts of up to 15 percent if you have two or more policies with them.

Pickens said that with the price of many insurance policies on the rise, consumers should look to save money by increasing their deductibles -- the amount they have to pay before their insurance coverage kicks in.

''My homeowners premium was going up substantially,'' Pickens said. ''So we raised our deductible to $1,000 and we were able to save a pretty good chunk on the premium.''

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