For example,  your home insurance carrier purchases an insurance contract that protects them if the losses from a catastrophe exceed $20 million.  In this case the insurance company that insures your house would pay the first $20 million in claims  and another insurer would reimburse the carrier for any amount above that amount.

The companies that provide reinsurance charge a premium to the primary carriers for the cost of the protection. Recently, the State of Connecticut Insurance Department has allowed  insurance companies to pass along their cost of reinsurance to consumers.

Why is this important to you? Well, if the carrier that insures  your home or business does not have reinsurance they may not have enough capital to pay all the claims as a result of a serious catastrophe. The question is not if a serious storm should occur it is when a serious storm occurs will your carrier have the capacity to pay the claims.

Two questions should be asked of your agent?

1. Does the carrier the agent is placing the business with have reinsurance to cover claims if there is a catastrophe?
2. Will that carrier be passing on the additional cost of the reinsurance premium to the policyholder?

There will be more drivers riding their cars without insurance or without adequate insurance to protect you.  Uninsured motorist coverage is your way of protecting against this risk.

Imagine for a moment, another driver hits you from behind by failing to stop at a stop light – a common occurrence. Now imagine the other driver runs off or has no insurance, but that your seriously injured. Your uninsured motorist coverage will pay for hospitalization and rehabilitation to bring you back to health. However, these bills can mount rapidly and $50,000 — even $100,000 — may not be enough. We recommend at least $100,000 per person and $300,000 per accident uninsured motorist coverage for individuals and small families that own property. More coverage is required, especially if you have no health insurance due to unemployment or for other reasons.

Medical coverage is helpful in the same situation, when the at-fault party in an accident doesn’t have enough insurance. Medical coverage pays for the same types of expenses that are paid by uninsured motorist coverage, but medical coverage pays out immediately when bills are due. With uninsured motorist coverage, injuries may need to be fully restored before payments are made. Medical coverage is primary insurance and pays first with a claim against your policy. It’s a worthwhile coverage to have, especially if you do not have any health insurance on your own or if you have a high-deductible health insurance plan.

There are many issues to consider when deciding on the appropriate limit for uninsured motorist coverage and medical insurance coverage on your auto insurance. It’s best to consult someone who has experience with the issues involved, and it’s definitely a wise decision to review the coverages now. Don’t wait until it’s too late, especially these days when more people are driving without adequate insurance. We’re seeing many folks cut back on important expenses like auto insurance this year. A warning is in order. Now is the time to be even more vigilant and confirm that your auto insurance coverages are set right for your individual and family situations.

An annual policy review is the ideal time to evaluate the changes that should apply to you. Ask your agent to review new features, like accident forgiveness, guaranteed renewal and deductible rewards. He can discuss the details about the features and ensure that you are getting the best value for your time and money.

Unfortunately, there are insurance companies that focus mainly on price, and they don’t provide a system for annual policy reviews with a licensed insurance professional. In this case, people are unable to easily take advantage of improvements in their coverage or take advantage of cost reductions they deserve. The other companies don’t perform this service, because they pour more money into advertising and new customer acquisition than they do into proactive contact with their policyholders. What kind of relationship do you want with your insurance company? Hopefully, it’s not hands-off until you discover your missing out on something important.

Your life changes constantly, and so do the companies that serve you. Who can keep up?

In short, the  wise choice that promotes your best interest is the one where you develop a frutiful relationship with an agent that can keep you in the loop, and help you make decisions that best meet your needs. You’ll suffer fewer unpleasant surprises and you most likely will save money over the long term.