Commissioner Donelon Encourages Insurance Policy Spring Cleaning
for Financial Savings on Your Insurance
Released: April 1, 2009
these uncertain financial times, knowledge is your best protection,
when it comes
to insurance. According to the National
Association of Insurance Commissioners, a vast majority of Americans
believe they are smart about insurance; however, a deeper look
at the issue tells a different story. In a ten question IQ quiz
the nation’s insurance knowledge, on average, Americans flunked
the test with only a 40 percent score.
“By arming yourself with the facts and improving your insurance
IQ, you can make sure you are adequately protected, without paying
more than you should for that coverage,” said Louisiana Insurance
Commissioner Jim Donelon. “The Louisiana Department of Insurance
offers these tips on how you may be able to cut back on the cost
of your insurance.”
factors can affect your auto insurance premiums. Some of these
in mind include: vehicle make and model, vehicle
safety features, your age, gender, marital status, income, annual
mileage, mileage to work, coverage limits, claim history and territory.
• Ask your insurance producer about discounts such as a multi-car
discount, good grade discounts for students under 25 years of age,
and mature driver discounts for consumers between 50 and 65 years
of age. Teens can often receive a discount for completing a driver’s
education course and many companies offer discounts to anyone who
completes a defensive driving course.
with your producer about the pros and cons of higher deductibles.
higher deductible you will be responsible for
more of the cost to repair damages caused in an accident, but you
will pay a lower premium.
a good driving record. Some companies offer discounts to drivers
three or more years without an accident or moving
a good credit history. Your credit score can have a direct impact
premiums both for new policies and at renewal.
your producer if your company offers discounts for equipping your car
features, such as anti-theft devices, anti-lock
brakes and automatic seat belts.
• Not every
company charges the same rates for coverage. Shop around and compare
from at least three different companies
for the best coverage at the best price.
companies are beginning to charge for auto insurance based on various
such as miles driven, speed and other driving
habits. These kinds of policies require a monitoring device to be
installed in the vehicle. If you drive minimal miles each month and
have good driving habits, you should look into this type of policy.
• Install protective devices — such
as a burglar alarm system, smoke detectors and deadbolt locks.
Notify your insurance
producer if you have these devices or have recently installed them.
consolidating your homeowners and auto insurance policies with
the same insurer,
as you might be eligible for a multiple-policy
discount. However, be careful of switching your homeowners insurance
if you have been with your company for three years or more, as by
Louisiana law your company cannot cancel you or change your coverage
or premium without due cause.
maintain a good credit history. Many insurance companies consider
history when determining how much to charge for homeowners
insurance for new policies and at renewal.
maintenance and upkeep of your home can also save you money in
the long run.
• You can
receive insurance premium discounts if you build or retrofit your
to comply with the Louisiana State Uniform
Construction Code, or install mitigation improvements demonstrated
to reduce the amount of loss from a windstorm or hurricane.
Property & Casualty
Tax Exclusions, Rebates, Credits and Deductions
are exclusions from state sales and use tax for homeowners who
shutter devices for hurricane protection.
• Property owners are entitled to a state tax rebate whether
you owe taxes or not, if you were charged the Louisiana Citizens
Property Insurance Corporation assessment on your 2008 policy. And,
if you have not submitted your rebate for 2007, it’s not too
late to do so.
• A one-time
state tax credit is available effective July 1, 2008, for seven
of the premiums you may have paid on your
primary residence for homeowners, condominium owners, or tenant homeowners
insurance. Any Citizens assessment must be subtracted from the total
premium paid before applying the seven percent tax credit rate.
• You can
also receive state tax deductions for voluntarily retrofitting
your home to
comply with the Louisiana State Uniform
owners impacted by Hurricanes Gustav or Ike can claim uncompensated
that exceeded $100 with the Federal Hurricane
Tax Deduction on their 2008 taxes.
• If you
have a group policy with your employer, use the open enrollment
to find out if there are any provider options that
may be less expensive than your current provider.
in-network when possible, making sure to get referrals and pre-certifications
as required by your plan.
all receipts for medical services and expenses. In the event you
deductibles, you might qualify for a tax
deduction for out-of-pocket medical expenses.
a healthy lifestyle. Some insurers take your lifestyle into consideration
when determining premiums. You may be able to
reduce the cost of coverage if you quit smoking, drive more safely
and maintain a healthy weight.
healthy or get healthy. Insurance companies might review your health
and will consider certain behaviors, like smoking
or excessive drinking, when determining your premiums.
risky behaviors. Dangerous hobbies, such as skydiving, hang-gliding
or rock climbing,
will likely cause higher insurance
premiums. If you are an international traveler, your rates will be
higher as well.
• Maintaining a good driving record may cause your life insurance company
to give lower rates because you wouldn’t be considered as much of a risk
for life insurance as would someone with a bad driving record. This varies company
by company and is something to ask your life insurer about.
• Purchase life insurance at a young age when you are usually healthier
and the rates will be more affordable.
Visit the Department of Insurance Web site, www.ldi.state.la.us,
and click on the “Test Your iiQ” button to test your insurance knowledge.
The Department Web site is a great source for insurance information. A consumer
publication section is found by clicking on “Publications, Guides and
Forms” near the top of the screen. There you will find information on
all types of insurance including auto, homeowners, individual health, life
insurance, fixed deferred annuities and storm mitigation incentives. You can
also compare rates of different companies by accessing our auto, homeowners
and long-term care rate comparison guides. If you have any insurance questions
or concerns, you can reach any of our consumer affairs divisions toll free