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1. Bolster Your Emergency Fund
It is critical to have an emergency fund for small crises or to cover living
expenses in case you lose your job. In addition to examining your budget for
ways to save, you might be able to identify savings in your insurance
policies.
- Find hidden savings in your family’s auto policy. There are ways to keep
costs down without forgoing necessary coverage. Ask your insurance agent or
company about these and other possible savings:
- Ask if you are eligible for any discounts. Here are some discounts that
might be offered:
- Two or more cars on a policy
- Participation in driver education courses
- Good student driver under age 25
- Mature driver (between 50 and 65 years of age)
- Airbags or other safety equipment
- Anti-theft devices
- Multi-line discounts if you have renter’s or homeowners insurance on same
policy or with same company that insurers your car
- Ask if it is possible to reduce costs by raising the deductibles on physical
damage (collision and comprehensive) coverages. Review your current deductibles
to determine whether you can afford to absorb a larger portion of your loss in
the event of an accident. Also, consider lowering or eliminating physical damage
coverages on older vehicles — unless a lienholder, such as a bank, requires the
coverages.
- If you have college-age children on your policy, you might be eligible for
discounts if they attend school at least 100 miles away and have minimal access
to the insured vehicle.
- It pays to shop around before buying insurance because prices can differ
among companies. When getting quotes, be sure the policies you are comparing
have the same coverages and deductibles. In addition to cost, you should also
carefully consider other factors such as service, dependability and the
financial condition of the insurance company.
- Take advantage of your Flexible Spending Account (FSA). Health insurance
policies do not always pay for such procedures as allergy tests or braces, but
an FSA can help you save on these out-of-pocket costs by allowing you to set
aside pre-tax dollars for uninsured medical expenses and childcare. Ask your
human resources department about your employer’s FSA and what types of expenses
can be reimbursed through the program. If you opted out of the FSA program this
year, consider signing up in the next open enrollment period. Remember, however,
that any unused money in an FSA does not roll over to the next calendar year, so
try to estimate your costs carefully at the beginning of the year.
2. Conduct a Coverage Check-Up
You might have purchased your insurance policies when you had a larger
household budget and savings account. Review your insurance policies to make
sure you can cover all deductibles and that they meet your current needs.
- Review your health insurance coverage. If you have an individual health
insurance policy, work with your insurance agent or broker to try to reduce your
premiums by modifying benefits or cost-sharing requirements. If you are offered
coverage under a high-deductible health plan (HDHP), please note that — although
HDHPs are one option for saving money on health costs — such plans can leave you
exposed to considerable unexpected out-of-pocket expenses. Most important, do
not drop your health insurance coverage altogether, because you could lose
guaranteed-issue and pre-existing condition protections under state and federal
law.
- Consider COBRA. To help workers maintain their health coverage while they
are between jobs, the American Recovery and Reinvestment Act (ARRA) provides a
65 percent reduction in the premiums payable by involuntarily terminated workers
and their families for health care continuation coverage under the federal
Consolidated Omnibus Budget Reconciliation Act (COBRA). For more information,
visit http://www.dol.gov/ebsa/cobra.html
- Review your life insurance coverage. Now is also a good time to review your
life insurance needs to ensure you have the right policy for your financial
situation and your family composition. Life insurance is an important way to
cover the financial effects of an unexpected or untimely death. When considering
your coverage, be sure to factor in life insurance you currently have, including
group insurance where you work or veteran's insurance. Don't forget to include
benefits from Social Security or survivor's benefits from a pension plan.
- Ensure your homeowners insurance policy reflects any recent improvements. If
you have updated areas of your home to make it safer or have upgraded your
heating or electrical systems, you could be eligible for discounts that might
lower your premium.
More Information
If you have questions or are confused about your insurance
coverage, contact the Arkansas Insurance Departement Consumer Services
Division at (800) 852-5494 or (501) 371-2640.
Get smart about your insurance needs! More information about auto, home,
life and health insurance options — as well as tips for choosing the coverage
that is right for you and your family — is located on the NAIC Web site, www.InsureUonline.org.
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