Sunday, January 8, 2012

Insurance, boring but important. Here are 6 money-saving tips for retirees

Auto and homeowners insurance cost-savings tips for retirees:

1. Combine homeowners insurance and auto insurance in one account with the same company. Such consolidation can save you money.
2. Be open to a higher deductible. If you can bare a bit more risk, you will see greater premium savings. Make sure you are given several options for deductibles, coverages and premium rates.
3. Make sure your agent has details about you: If you have a college degree, a good credit score, that your mortgage is paid off, that you have no loans on your vehicles. Make sure your agent knows if there are young drivers in the household, They may qualify for "good student" discounts – 3.0 GPA or better. This is important if grandparents have grandchildren living with them... a growing trend. A better grade point for the grandson may translate into a lower insurance rate.
4. Change agents, if you're not satisfied with their service. Interview several agents. Conduct background checks through your state's insurance commission on agents and their firms. Make sure the company selling the insurance has a long track record and is rated among the best. Seek out agents that have earned industry designations such as the CIC (Certified Insurance Counselor), which means they have completed a course of study and take additional classes every year. Get recommendations from friends, co-workers, family.
5. Choose an insurance broker or agent who cares about you and your needs. Your agent should check in at least once a year to make sure nothing has changed and coverages are where you want them. Select an agent that conveys a sense of personal interest.
6. Meet at least once a year with your agent to talk about what's changed, what your agent should know about. Look for ways to hold down costs without sacrificing coverage.

By Julia Anderson
If you are on a more or less fixed retirement income, saving money on your annual car and homeowners insurance bill is one way to reduce ongoing household expenses. That said, the bottom-line cost of your insurance should not be the only criteria for selecting an insurance agent or the company they represent. As with everything, there are trade-offs between quality service and cost.
In the past 12 months I've taken several steps to bring my ongoing household expenses in-line with my retirement income. Those steps include refinancing my home mortgage loan for a lower monthly payment, signing up for mandatory Medicare, which has reduced my health care insurance costs, and moving my insurance business to a new agency and consolidating coverages at a reduced cost without sacrificing too much on coverages.
In that process I came to know Audrey Brouwer, a certified insurance counselor in my home town. She expertly walked me through my options for coverage and the cost of that coverage for home, farm and auto.
Over lunch, I followed up with her for what general (insurance) advice she might offer retirees, particularly women on their own.
"Buying insurance," she said, "should not be complicated. Insurance is ask questions and then you can make informed decisions."
In many households, however, one spouse may handle all financial matters. In older couples it's usually the husband. Younger couples more often work together, she said.
A newly 60-and-single woman should feel comfortable asking questions, getting the hang of insurance lingo and finding an agent who has her best interest as their No. 1 goal. Look around until you find the right fit. This meeting to establish a relationship and evaluate premium coverages is important. For those who like studying up on topics, get a copy of Insurance 101, a what-you-need-to-know brochure from the American Insurance Association.
Building a relationship
Consumers of all ages should expect a solid ongoing relationship with their insurance broker, Brouwer said. People approaching or moving into retirement likely have worked hard for their assets and want to protect them. They need an adviser who is interested in their needs, first. That may sound like so much industry hype but I switched brokerage firms last year because every time I called that office, I talked to someone different who really didn't know my story or my concerns.
If you are newly single, an appointment with your insurance agent should be near the top of your to-do list. And if you start a new relationship or re-marry, insurance coverages must be discussed. There's money to be saved through consolidation without sacrifice.
"Clients must take the time to sit down, be willing to talk about what's going on in their lives and what their needs are in terms of coverage and cost," Brouwer said. "They need to ask questions and make sure their agent or broker is taking time to answer questions and explain coverages and cost trade-offs."
A good agent should stay in touch at least once a year to find out what might be changing in your life. An ongoing relationship means the insurance agency is fulfilling its role as circumstances change, she said.
Be ready to answer these questions when meeting with an insurance broker:
1. What do you want protected? What needs to be protected?
2. What kind of trades off do you want to make in terms of coverages, their costs and your ongoing household budget?
3. Be ready to listen to your broker when she talks about risks faced by seniors and what you need to protect. Don't be so cheap that you endanger your core assets, if something bad happens.
4. Be ready to share information about yourself, your financial situation, your property and what's on your mind. An agent can't help you unless you tell them what they need to know. For example, do you have an RV, a vacation home? Make sure everything is on the table.
"Yes, you want to stay on a budget, but clients should consider several scenarios in terms of the risks they can take on versus the coverage needs," Brouwer said.
Finding an agent
When considering a new agent or new coverages, it should not be a one-time meeting across a desk. A first meeting would determine your needs. Once the agent knows those needs, she can go to the insurance companies she represents and come back with a summary of premium rate options. Those options should be discussed in a second or third face-to-face meeting as the dialogue continues.
"Buying for price alone can leave you with inadequate coverage," Brouwer said. "Each person has insurance needs specific to them. This is not a cookie cutter business."
For women who want to learn more about insurance costs and coverage, a good strategy is to take advantage of the training received by your insurance agent. Let them be a resource to identify risks and make sure you have the right coverage at the right cost. Long-term care insurance was discussed in a previous post. Annuities and term life-insurance were also addressed, previously.
Thanks Audrey for your help with this post.
For more:
Washington State Office of the Insurance Commissioner, click here.
Oregon Insurance Division, click here.
Tips for Choosing an Insurance Policy,  click here.
Consumers' Guide to Homeowner Insurance, click here.
American Insurance Association, click here.
Directory of Insurance and government resources, click here.


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