Document And Understand Your Transaction

• Insist that all promises made to you about future costs, benefits, or coverages be in writing. When your policy is delivered, ask the broker or agent to go over the policy language and conditions, including any promises that are specifically made as part of the policy contract.
• Keep in mind that only the insurance company has authority to change insurance policy provisions. Question any broker or agent who claims to have policy revision authority. If in doubt, contact the insurance company directly to verify the information related by the broker or agent.
• Obtain copies of everything you sign. Obtain receipts for any payment you make. Never pay in cash. All checks should be made payable to the insurance company or to the agency, not personally to the broker or agent. Be sure all receipts and checks show the policy number and the name of the insurer receiving the payment. Any receipt should also be signed and dated by the representative receiving the payment from you. Keep receipts and canceled checks in a safe place for the duration of the policy as evidence of payment.

If you pay by money order, remember that in disputes it may take some time to verify payment. Often you will be required to obtain copies of the front and back sides of the money order from the company or business that sold it to you.

• Be careful when using premium financing. Brokers or agents are not required to help you arrange to pay for your insurance on a monthly basis. However, they do have access to organizations that will allow you to pay for your insurance over a designated period of time. Premium finance companies charge for their services, and premium financing can be costly. Read the premium finance contract carefully and pay special attention to early cancellation wording.

When financing insurance premiums, a separate loan contract will exist between you and the financing organization. You will be expected to make payments even if you are unhappy with the insurance. Generally, the bank or financing organization will have the right to cancel the policy if you are late making a payment or miss a payment. Be sure you understand the terms and conditions before you agree to finance the premium.

You may also want to explore a less costly means of financing. For example, some insurers accept credit cards, which may have lower interest rates than those charged by premium financing companies. Also, ask whether the insurer has a program that allows you to pay by monthly installments. Sometimes monthly installment plans are available for a small service charge. If you have policies through the California Automobile Assigned Risk Plan (CAARP), you can arrange to pay the insurer in installments at no interest after you have made a down payment.

• Request copies of all illustrations or proposals that are shown to you, so you can study the illustration or proposal at home without pressure. This way, you will get a better understanding of what your insurance program is designed to do.
• Use the checklist you have created to be sure that important points are covered. Many consumer complaints arise because the buyer does not understand the coverages or limitations proposed for the policy. The unprepared consumer may not realize that the policy ordered fails to meet his or her assumptions regarding provisions such as waiting periods, deductibles, policy limits, premium payments, or optional endorsements. All of these vary from insurer to insurer. If you make assumptions, you may be unpleasantly surprised.