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Even if you spend wisely, save regularly, and invest strategically, you are not managing your finances well if you have not taken steps to protect your assets, your earning potential, yourself, and your family from the possibility of suffering a loss. Review your current insurance coverage to ensure you are adequately protecting your family and possessions. This protection is called risk management.

Effective risk management includes obtaining adequate insurance for you, your family, and your possessions. It also includes reducing your risk factors by purchasing vehicles with safety and anti-theft equipment, taking a defensive driving course, installing smoke detectors and a security system in your home. These actions also might reduce your insurance premiums.

Insurance can never repair the emotional damage a loss brings, but it can minimize your financial stress and help you preserve your personal financial resources if the worst does happen.

Choosing An Insurance Company
Before purchasing insurance, assess what you need to protect. Determine the level of coverage you require. Compare insurance companies and their policies. According to the Insurance Information Institute, these factors should be considered when selecting an insurance company:

• Consult consumer publications, A.M. Best Company reports (available in most libraries) and your state’s department of insurance.
• Contact independent rating agencies for more information.
• Visit your state’s department of insurance website to learn whether a company is licensed in the state and covered by the state’s guaranty fund, which pays claims in the event the company defaults; Buying from a company licensed in your state means your state’s department of insurance can help if there is a problem.
• Visit your state’s department of insurance website to find out whether complaints have been filed against a particular company.
• Ask family, friends, and neighbors what they like or dislike about their insurers.
• Get quotes from at least three insurers.
• Ask about discounts and savings, but pay attention to overall price; a company that offers few discounts still might have lower premiums.
• Ask if an insurer reduces premiums if you buy more than one type of insurance.
• Choose a company that is likely to be there when you need it.
• Select a company that treats you courteously and fairly.

Note: This content provides general insurance descriptions. Contact an insurance company for precise information on coverage, limitations, and conditions.