Maintaining Insurance Coverage in Tough Economic Times
Rising unemployment and the weak economy are forcing many Oregonians to look for ways to cut costs, including insurance expenses. The state Department of Consumer and Business Services offers this information about maintaining coverage and where to turn for help before making drastic insurance changes.
What happens if I don't pay my premium?
The company will cancel your policy and you will not have coverage. How this happens varies by policy.
You can't assume you have a grace period or that someone will call to warn you that your coverage is about to end. Most companies require that they receive payment by the due date. You may want to take your payment to the agent's office and get a receipt to ensure that it is received before the due date.
If you fail to pay your premiums, it may be difficult or cost more when you try to get insurance again. It is important to read your policy and call your insurance company or agent if you have any questions about your premium payment due date or when insurance protection will end if you don't pay a premium.
I'm paying $800 a month for health insurance premiums but I see advertisements for much cheaper coverage. Should I switch to one of those plans?
Make sure you know what you are buying. Some of these products may not be actual insurance plans. And if it is an insurance plan, it may provide fewer benefits or require you to pay more out of pocket before the insurance company starts paying. For example:
I lost my job. What are my health insurance choices?
Federal or state law allows you to continue your same employer plan for a limited time while you find a more permanent solution. However, you must pay the full costs.
People who lose their jobs have other insurance choices, depending on their health, income, and other factors. For example, if you are healthy you can usually purchase an individual plan or short-term insurance directly from an insurance company. Read more at: http://insurance.oregon.gov/news_releases/2008/120908-healthinsurance-jobloss.pdf
Money is tight and I can no longer afford my auto insurance. What should I do?
Driving without auto insurance is against the law. Call your auto insurer to check on ways that you might reduce the premium or make extended payment arrangements. Increasing deductibles and dropping coverage that is not required by law (for example, dropping collision coverage on an older car) can make a difference in the amount you pay.
Discounts may be available for a variety of factors based on your age, driving record, low mileage, whether you or a child completed a driver education course and so on. If purchasing a car, consider the cost of insurance as you decide what car to buy. Companies usually charge higher premiums for cars that cost more to repair or offer less protection from accidents.
If you must drop your required insurance, you will want to arrange alternative transportation. You can carpool with an insured driver, take public transportation, or walk or bike to your destinations.
Are there other ways I can save money on insurance and still be protected?
Oregon is a competitive market for most insurance. This means it pays to shop around since prices vary by company. Just be careful to also take into account the coverage you will get and the service and financial condition of the insurance company. Make sure you ask about discounts. For example:
I'm worried about my insurance company going broke. Is my policy safe?
Yes. The Oregon Insurance Division monitors insurance companies to make sure they have enough money to pay claims. Even in the rare event of an insurer insolvency, Oregon has guaranty funds that pay policyholders' claims up to certain limitations. Two funds provide this protection: the Oregon Life and Health Insurance Guaranty Association (OLHIGA) and the Oregon Insurance Guaranty Association (OIGA). For more information on guaranty funds, visit: http://insurance.oregon.gov/FAQs/guaranty_fund.html
Where can I call for help?