Thirteen Smart Insurance Moves for 2009

Smart insurance moves are all about minimizing risk.

Take a page from corporate America: Some companies are masters of risk management, while others still have a lot to learn.

"We've seen, in a dramatic way, how bad things can be for corporate America when they don't manage risk well," says Robert Hoyt, professor of risk management and insurance at the University of Georgia and past president of the American Risk and Insurance Association.

"The lesson for consumers is to manage their own risk well," he says. "It's the one thing you really can control directly."

Here are a few insurance strategies to consider for the coming year:

1. Investigate the financial health of your insurance carriers. "Don't overreact, because institutional companies should be in pretty good shape," says Bob Hunter, director of insurance for the Consumer Federation of America and former Texas insurance commissioner. "Do some research."

Check out the ratings of insurers by A.M. Best, Moody's, Standard & Poor's and FitchRatings. It's most critical for companies with policies where you're paying over a long period of time for a potentially large future payout, like life insurance, long-term disability or long-term care.

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"If they've been dropping the ratings, you might be concerned," Hunter says.

You often can get information from your state insurance department or the company that sold the policy.

"It's a good time for consumers to ask their agents to share that information," Hoyt says. And if you're shopping or re-shopping for coverage this year, the company's financial health should be one of the factors in your decision, he says.

If what you discover makes you nervous and you're thinking of changing companies, start investigating the surrender charges -- fees for canceling a life insurance policy, he says.

To make a smart move, "you need to know the price," Hunter says. And always make sure you have replacement coverage in place before you cancel any policies.

2. Discuss payment options. If it's difficult to come up with a chunk of money for annual or semiannual premiums, talk to your company about payment options, says Dave Evans, Certified Financial Planner and senior vice president of the Independent Insurance Agents & Brokers of America. Many will let you pay premiums monthly or quarterly.

And if you have to trim expenses, get advice on changes that would least affect your coverage, he says.

3. Don't go without health care coverage. When someone loses a job, many times paid or partially paid health insurance goes out the door.

But going without is risking financial catastrophe. Some options include joining a spouse's policy, continuing on your former company's plan through the Consolidated Omnibus Budget Reconciliation Act, or COBRA, and buying individual catastrophic insurance.

COBRA allows employees to keep employer's group insurance for a period of time -- generally 18 months -- after leaving their jobs as long as they pay their premiums. It generally applies to companies with 20 or more employees.

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