Written by Laura Adams
1. Your credit affects the rate you pay.
You probably know your credit reaches its tentacles far into your financial life, such as affecting the interest rates you pay for credit accounts. But many people don’t know that having poor credit causes you to pay higher premiums for auto and homeowner’s insurance.
Only a few states — California, Hawaii, Maryland and Massachusetts — currently prohibit insurers from using credit when setting rates. So, for most Americans, keeping your credit in tip-top shape makes property insurance more affordable. But credit isn’t a factor for other types of insurance, such as health, disability and life policies.
2. Not all damage is covered by homeowner’s insurance.
While a standard homeowner’s insurance policy provides you many protections — coverage for the structure of your home, your personal belongings, loss of use and liability — it doesn’t cover everything.
Policies often state for something to be covered, it must be “sudden and accidental.” That means if you’ve had a leaky faucet that caused damage over many months, it probably won’t be covered if you neglected proper maintenance.
However, even if they are sudden, certain natural disasters are almost never covered and require separate insurance, including floods and earthquakes. Windstorms, including tornados and hurricanes, are typically covered but may require separate deductibles.
Many factors influence home insurance rates, so ask your insurer about potential discounts. If you have ample savings, consider increasing your deductible to reduce your annual premium.
3. Driver education cuts the cost of auto insurance.
A smart way to cut the cost of auto insurance — and beef up your driving safety skills — is to complete an online drivers education course. It’ll include a review of traffic laws in your state and defensive driving tips. Driving courses are available for drivers of all ages and typically qualify you for a discount of up to 10%.
Also, passing a traffic ticket class can erase a limited number of points assigned to your motor vehicle record after getting a moving violation, such as speeding or failing to use a seatbelt. Cleaning up your driving record can help reduce your auto premiums.
4. Life insurance costs more for bad drivers.
And speaking of traffic tickets, your driving record is also a factor in life insurance rates. Having multiple violations is a red flag for insurers, who know poor driving increases your risk of death.
Depending on the laws in your state, violations typically stay on your motor vehicle record in the range of five to seven years. However, a citation for driving under the influence or driving while intoxicated sticks with you longer and could cause you to be turned down for coverage.
5. Disability insurance benefits don’t start immediately.
Disability policies help you keep up with everyday living expenses if you’re unable to work due to a covered injury or illness, such as pregnancy, cancer or heart disease. But they come with an elimination period, which is how long you must wait before a policy begins paying your benefits.
A typical elimination period for a long-term disability policy may last between 30 and 90 days. However, choosing a longer waiting period, such as 180 days, allows you to pay a lower premium.
6. You may have limited health plan options if you miss open enrollment.
No matter if you buy health insurance on your own or through a group plan at work, there are open enrollment deadlines, typically in the fall. Many people don’t realize missing a deadline means you can’t change your plan or get new coverage for the following year unless you have a major life event, such as losing your job or having a child.
If you purchase individual health insurance, open enrollment in the federal marketplace will be November 1 through December 15, 2018, for a plan that begins as early as January 1, 2019. In most cases, missing it means you must wait until the next open enrollment to sign up for a new plan or to change your selection.
You can still buy a short-term health plan for temporary coverage, but it may not be a qualified health plan under the Affordable Care Act. In other words, a short-term plan may not meet ACA requirements for minimum essential coverage or cover pre-existing health conditions.
To get the best health insurance at the lowest cost, be sure to shop and compare plans before the open enrollment ends each year.
Information gathered from http://workwell.unum.com