Tips for Buying Insurance

Selecting the right insurance coverage is important decision. You want to obtain the correct amount of insurance coverage and the types of coverage that will best protect you and your family. It’s best to compare insurance companies and the products they offer to find the best price, quality and customer service.

Texas Law provides certain protections for consumers of auto and homeowner insurance policies and Texas Law mandates that the Insurance Companies inform you of Consumer Bill of Rights, which provisions explain your legal rights and responsibilities.

You can the Consumer Bills of Rights for both types of policies on the Office of Public Insurance Counsel (OPIC) website at www.opic.state.tx.us.

If you drive in Texas, you must have at least minimal insurance to pay for accidents losses you cause. Most Texas drivers uphold this minimum requirement and purchase auto liability insurance to meet this minimum requirement.

There are eight types of coverage in a typical auto policy:

• Liability insurance,
• Collision coverage,
• Comprehensive coverage (physical damage other than collision),
• Uninsured/underinsured motorist (UM/UIM),
• Medical payments,
• Personal injury protection (PIP),
• Towing and Labor coverage,
• Rental Reimbursement Coverage

You should always make sure your coverage fits your needs. While it is not prudent to buy more coverage than you need, you should not buy less coverage either.

It is advisable to compare the cost of your annual premium against your car's Blue Book value, minus your deductible. If you're paying more in premiums than it would cost to replace your car, consider dropping collision and comprehensive coverage. If you still owe money on your car, however, your lender will require you to maintain full coverage.

You may be able to lessen some coverage’s and lower your premium.

You may not need both PIP and medical payments coverage. In our opinion, PIP coverage is a better choice than Medical Payments Coverage.

If you belong to an automobile club, you may already have towing and labor coverage and don't need it in your policy.

Insurance companies may sell several types of homeowners’ policies in Texas, each with a different level of coverage:

• HO-A policies,
• HO-A amended policies,
• HO-B policies,
• HO-C policies,
• and approved alternative policies.

For a comparison of the policy forms approved for sale in Texas, visit the OPIC website.

Be sure to maintain adequate coverage. Buy enough coverage to avoid a major financial loss if your home is severely damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house.

You should also consider insuring your home's replacement cost, not its market value. The market value may be higher or lower than the cost to rebuild your home. If you have replacement cost coverage and your house is destroyed, you can rebuild your home on the same lot at the current local construction costs.

Construction costs change, so you should update your coverage amounts annually.

When purchasing homeowners insurance, choose the highest deductible you can afford. Your deductible is the amount you must pay before the insurance company will pay. Higher deductibles will lower your premium, but you'll have to pay more out of your own pocket if you have a claim.

Your landlord's insurance will not cover your personal belongings in the event of a fire or theft. Renters insurance covers stolen, damaged, or destroyed household goods and personal property and also provides liability coverage.

There are two standard renters’ insurance policies: the Broad Form (HO-BT) and the Comprehensive Form (HO-CT).

Renters insurance may duplicate other coverage. For instance, if you are still a dependent, your personal property may be covered by your parent's homeowners’ policy.

This coverage is limited, however, to an amount equal to 10 percent of the total personal property coverage provided by the policy.

Ask your agent whether you qualify for any discounts the company might offer. The amount will vary by company.