How to Raise Your Insurance IQ

Posted in

May 11th, 2010

On a typical day, the average person makes hundreds of decisions and many of them occur without having the full grasp of the situation.

This is especially true when it comes to making choices regarding insurance coverage. According to a recent press release by the National Association of Insurance Commissioners (NAIC), their research has shown “…only 45% of Americans feel confident making insurance decisions and 86% do not fully understand terms used in current health care reform discussions.”

If your insurance IQ is a little lacking, you should take proactive measures to educate yourself on the subject. Luckily, there are plenty of steps you can take to educate yourself on insurance terms, insurance basics and gain the upper hand when it comes to managing your personal level of coverage.

• Baby Steps: Educating yourself on the variety of insurance coverage is a predecessor to all. Not sure where to start? Visiting the NAIC’s consumer education website, www.InsureUonline.org, is the first step.
• Read All About It: Next time an insurance story hits the news, take the time to read it. Only by facing your demons of insurance FAQ ignorance, will you be able to take the next steps.
• Dig Deeper: Informational overload can be especially dangerous to the naive. Next time you spot a story regarding insurance companies or any insurance term you may not be familiar with, write it down. Later, refer to your list and conduct your due diligence online.
• Open Your Mind: Depending on what news you watch, you may not be getting the full story regarding health insurance reform or any policy changes affecting the insurance industry. Going out of your way to seek conflicting views will provide you with the fodder required to make your own decisions.
• Ask Questions: Taking what you have heard about insurance coverage at face value can be a costly mistake. Regardless of whether you have health insurance, life insurance, auto insurance or even homeowners insurance, you need to review your policies and ask about lapses in coverage. In this case, go to the darkest recesses of your mind and ask if your coverage extends to any situation in the worst, case scenario.
• Shop Around: Comparison-shopping is not only a great way to save money, but a way to open your mind to new insurance terms. The more you research, the more exposure you will have to the secret language of insurance companies.

Honestly, no one is born insurance savvy. Luckily, we all have the brain capacity to learn new things over the course of our lifetime. Making the efforts to educate yourself on the nuances of the industry will enhance your confidence level and prepare you for handling insurance coverage for your family.