We all will face misfortune at some time in our lives, and don’t want to endure those sorts of hardships without a partner, at least financially – an insurance company.

But sometimes, the insurance industry can take advantage of this relationship and actually add to problems their customers face.

Here are some suggestions for how to keep your insurance company in line with your interests, not only for submitting claims, but also for negotiating the best deal for you, the insurance consumer.  Remember, the compensation for the top insurance executives and, most importantly, their yearly bonuses, are determined by how much they can get their customers to pay for the least amount of service possible.

The idea here is to switch that formula around – to get the insurance company to pay out the most for claims, and for the clients to pay the smallest premiums possible.

Check Your Home Insurance

A year filled with so many natural calamities was also a wake up call for homeowners to review their insurance policies and make sure coverages have kept up with insurance company proclivities to skew the language in policies toward the ambiguous.  The more ambiguity, the less your insurer has to pay if your home is harmed by a natural disaster.

Guard against this uncertainty by using digital technology to photograph and record as much of your home and its contents as possible, and make sure you upload these files to remote cloud storage, so that they can be recovered even if your home computers and smartphones are destroyed.  

You need to painstakingly go over these records of your belongings with your insurance agents.  Put them on the spot, demanding that your personal property must be replaced, at full value, in the event of disaster.  If they won’t commit, threaten to switch insurers – that will usually change their tune.

Re-examine Your Life Insurance

Most persons eventually reach a point in their lives where the question pops up: Will someone in my life be adversely affected, from a financial standpoint, if I should suddenly die?  When the answer to that question becomes a resolute ‘yes’, it’s time to buy life insurance.

Term life insurance is the most common type of policy.  You pay an annual premium for the “term” of the policy, which is usually 20 years.  If you die within those 20 years, your beneficiaries will collect the specified amount indicated on the policy. For example, a $1 million, 20-year term policy typically has a premium of $600/year – meaning you’ll pay $12,000 total for a million dollars worth the coverage.  If you die within the 20-year period, your beneficiaries will receive the $1 million, tax-free. If not, the insurance company wins.

From there, life insurance policies can get much more intricate.  There are all sorts of custom options that can be added to cover temporary, and even permanent disabilities, on a sliding scale.  These policies can become so complicated that even the agents who write them can barely explain them to their clients.

Although not all life insurance policies are structured to alleviate financial burden before the occasion of death, some policies have special options available for individuals with long-term disabilities that will help cover expenses.

That’s why if you are a person of means, with complicated personal property structures and trusts, it’s a good idea to pre-plan what you want to get out of a life insurance policy, and integrate it with your living trust, before you even begin speaking to an insurance agent about purchasing any specific policy.

Check Your Car Insurance

Since 48 of the United States mandate that you must have car insurance (Mississippi and New Hampshire do not), most automobile policies and their coverages are pretty much the same.

But there is one area that you should be mindful of – extra uninsured and under-insured motorist protection.  If you are struck by someone who is not insured, or is only insured the state minimum amount, and your injuries exceed those amounts, you will be liable for any costs over those minimums.  This extra insurance pays the difference between those low coverages and the total expenses of your injuries.