Know what to look for when purchasing insurance

Insurance coverage is important so take time to research providers.

Insurance coverage can contribute to personal financial security and stability if it is provided through a reputable company. Whether you are interested in purchasing life, home, rental, auto or any other type of insurance, it is important to research your options before making a decision.

Before making the purchase:

  1. Visit your state insurance department to verify that companies are licensed and covered by the state guaranty fund (pays claims if a company defaults) and to see if they offer company insurance rate information.
  2. Compare insurance prices online and with independent insurance agents.
  3. For company complaints visit the National Association of Insurance Commissioners or your local state insurance department.
  4. To verify the financial stability of insurance companies check ratings from A.M. Best, Standard and Poor’s and Moody’s Investors Services. Most public libraries should have these resources.
  5. For general insurance information visit the following: American Council of Life Insurers, the Insurance Information Institute, the National Association of Insurance Commissioners, your state insurance department and

Once you have selected an insurance company:

  1. After you have paid your first insurance premium payment, you should receive a written policy within 60 days. This describes the details of your coverage and also is your confirmation that the insurance agent sent your payment to the insurance company. If you do not receive a policy within 60 days, contact your agent and the insurance company.
  2. Since life events occur unexpectedly, review your insurance coverage policies annually to make sure your coverage is meeting your current needs.

Should you suspect fraud, contact the Insurance Crime Bureau’s hotline at 1-800-835-6422. For additional information visit the Coalition Against Insurance Fraud.

After researching and selecting an insurance provider, it is important to note that a person can be denied insurance coverage due to information in their credit report. If denied coverage, the Fair Credit Reporting Act requires that the company denying coverage provide the name, address and phone number of the credit reporting agency that provided the information. Should this occur, it is recommended that you contact this particular credit reporting agency and request a copy of your credit report. This report will be free as long as it is requested within 60 days of being turned down for insurance. For additional information on this topic review the Federal Trade Commission article entitled “How Credit Scores Affect the Price of Credit and Insurance” or contact a Michigan State University Extension educator.

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