Sunday, January 13, 2002
Time to check insurance
Survey: Many don't know how much coverage they need
By Jenny Callison
Do you suffer a major attack of MEGO (My Eyes Glaze Over) when you scan your insurance policies? Or worse, do you relegate those documents to a stack of papers you'll review someday when you have a chance?
The National Association of Insurance Commissioners suggests that now would be a good time for you to assess the coverage you've purchased for your home and vehicles, your life and health. They've even set aside a week for that very purpose.
This Monday through Friday has been designated as Get Smart Week by the NAIC and the 50 state departments of insurance it represents. During this week, Tristate residents are encouraged to contact their state department of insurance to become better informed insurance consumers.
Get Smart Week isn't about selling or canceling policies, Ohio Insurance Director Lee Covington said. It's about making sure your family is properly covered. We believe the Ohio Department of Insurance is your best resource for insurance-related questions and concerns.
The NAIC is concerned that consumers often might not have adequate coverage to protect them in times of crisis, and that policy holders often don't know what questions to ask about the levels of coverage they need. That feeling was borne out in an association-sponsored national survey of 1,021 adults. Respondents were asked questions based on the types of insurance coverage they carried, including life, home, auto, health, personal liability and disability.
A large majority (83 percent) agreed that an annual review of one's insurance policies was a good idea, and 76 percent said they re-evaluate their coverage annually. But only 28 percent of respondents claimed to understand the details of their insurance coverage very well.
Young adults 18 to 24 are least likely to understand the details of their coverage, and older adults are least likely to review and update policies yearly, NAIC found.
It is understandable that reviews are a higher priority during the years when a family is growing, Mr. Covington said. But changes in the insurance industry are frequent and significant. Older adults need to be careful that changes that may benefit them are not overlooked.
Added Greg Thomas, chief deputy commissioner of the Indiana Department of Insurance: The maze of health insurance is very confusing to people, especially seniors, because it's constantly changing.
Almost one in five surveyed feared that they had too little coverage, 67 percent thought that their coverage was adequate for their needs, and 7 percent admitted to not having a clue as to their insurance coverage needs.
Unfortunately, a lot of people only pay attention to their insurance when something happens and they need it, said Roger Snell, a spokesman for the Kentucky Department of Insurance. Where it becomes most striking to us is after a tornado or fire, when many people are affected. People learn the hard way about what their insurance covers and what it does not.
Mr. Snell said January is a good time for policyholders to evaluate their coverage, because many policies come up for renewal shortly after the new year.
It's also the time when we're the most resolution-oriented, he said.
The NAIC survey found that most Americans don't take advantage of the services offered by their states' insurance departments, which are unbiased sources of information. Only half of the adults questioned knew their states offered free information through a department of insurance.
Get Smart Week aims to raise public awareness of this resource.
When we advise people, we don't recommend one company over another, we just lay out the options, Mr. Thomas said. And we don't advise them to purchase anything they don't need.
Becoming a shrewd insurance consumer can start with a telephone call to your state's department of insurance or a visit to its Web site. Each agency answers the public's questions and offers free publications which can be ordered or, in some cases, downloaded from the Web site.
Ohio Department of Insurance: (800) 686-1526 or (614) 644-3481; or www.ohioinsurance.gov.
Indiana Department of Insurance: (317) 232-2385 or www.in.gov/idoi.
Kentucky Department of Insurance: (502) 564-6098; or www.doi.state.ky.us/kentucky.
National Association of Insurance Commissioners: www.naic.org.
Here are tips for enhancing your insurance IQ:
Check with your state department of insurance for free advice and up-to-date information before buying any type of insurance policy.
Schedule a routine checkup with your insurance providers at least once a year. Find out whether there are specific exclusions for your liability. For example, many homeowners policies do not cover trampoline accidents or dog bites.
Find out if your policy simply offers a fixed replacement value for home or auto, or includes an inflation factor.
If you think your home or auto coverage is inadequate for a major claim, ask about adding an umbrella policy to offer a second layer of protection.
Inquire about the cost benefit of opting for higher deductibles.
Do you have kids going off to college? That transition time requires a new look at your policies to make sure those semi-independent offspring have health, auto and personal property coverage. The Kentucky agency offers a College Students' Guide to help parents.
Ask specifically about discounts for good driving records, good health, good grades, or special education or training.
Shop around for identical products and services. Not every company charges the same rate.
Remember: an insurance policy is a legal document. Read it carefully.
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