TIME TO REVIEW PERSONAL INSURANCE AND REDUCE COSTS–NOT COVERAGE

by Alan Plafker, PRESIDENT & CEO Member Brokerage Service LLC

A Melrose Credit Union Service Organization

The current economic environment is pessimistic, everyone is worried. Some of us MUST reduce expenses, and for many others it is popular and in vogue to reduce expenses. In either case, for all of us, Insurance is a major expense and a large share of our budget so it needs to be reviewed.

The goal should be to cut your insurance expenses without compromising the coverage you need. First, you should work with your current insurance company to reduce your costs and then shop around with other insurance carriers if needed. If you insure with an independent insurance agent he or she generally represents many different insurance companies and can do the shopping for you. Otherwise, you may need to call others for quotes if your insurance representative represents only one company.

HEALTH - MEDICAL INSURANCE: This should be your most important protection. Many of us are covered by an employer or spouse’s employer or you may have individual coverage. This coverage should be kept in force at all times, and costs can be reduced by considering a few factors. Use large deductibles, and high copays if possible. Do not drop this insurance. Consider alternatives like a lower cost HMO, or plans available from NY State that are government supplemented to reduce coasts. It is most important that Hospitals & Doctors are covered. If needed, reconsider options like dental, vision & drug plans. In the event of a major medical emergency it is the hospital & doctor bills that can be astronomical and cause a financial disaster.

AUTO INSURANCE: This is required by law so there’s no choice if you own a vehicle. Liability coverage and high limits are most important for financial protection in the event of an accident so don’t reduce your liability limits. You may need fire, theft & collision if the vehicle is expensive or has a loan but otherwise it is not required. Make sure you are getting all available discounts such as:

• accident free discounts,
  
  
  
• defensive driving class,
  
  
  
• multi-policy discounts (if your home is insured with the same insurance carrier), and
  
  
  
• vehicle safety discounts for ABS brakes, running lights, air bags, alarms, etc.

HOME INSURANCE: It is important to insure your home for the full replacement value but not up to the market value which may be more than replacement. Review the amount of insurance and make sure you have the right coverage form with the least exclusions. There are many options to review to make sure you have only what is needed. Increase your deductible to reduce your cost, but don’t reduce your coverage. Chances are you won’t submit a small claim since it can be managed, but you need the right coverage and limits in the event of a major loss. There are also other limitations for things like jewelry and other valuable items. If you have separate coverage for this and need to reduce costs put your valuable items in a bank or credit union vault before dropping any coverage.

DISABILITY INSURANCE: Review coverage as premiums are more affordable with longer waiting periods. It is important to maintain coverage for the long term benefits.

LIFE INSURANCE: This coverage should be reviewed annually. Circumstances and lifestyles change and the coverage you may have may need adjustment. There are many types of policies. Some (like term insurance) cost less in the beginning and premiums increase after 5, 10, 15 or 20 years. Some (like whole life or Universal life) cost more in the beginning but last for many years without premium increases. If you need to reduce the cost you spend for life insurance it is possible a different type of coverage may provide the limits you need at a lower cost. Policies purchased years ago may have higher charges than policies today. Rates have been reduced lately as people are living longer, and companies are competing for the business. You may qualify for better rates if you are healthy. For your protection always get an approval for a new policy before letting an existing policy cancel.

So, to sum it up, don’t compromise your coverage needs. Review your policies often, use high deductibles and maintain your insurance to protect the large exposures to make certain the insurance is there when you really need it. Contact your agent soon and review your insurance, or you may contact me for any further advice.

Your Professional Insurance Agent…
We want you to know about the insurance you’re buying.

Alan Plafker is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a licensed Insurance Broker and serves on the Board of Directors the PIANY (Professional Insurance Agents Association of NY) and on the Board of CIBGNY (Council of Insurance Brokers of Greater NY). His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 ext. 1082.

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