How to Maintain Insurance
It sometimes feels like insurance is wasted money. During the good times, you pay your bill every month with nothing to show for the expense. During the bad times, you're as likely as not to be too stressed and angry to appreciate the insurance benefit. However, letting your insurance policy lapse is one way to ensure that the money you've spent so far is, in fact, wasted. Once you've set up insurance you feel you need, it's best to maintain the policy as fully in force.
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Instructions
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Buy only what insurance you need and are certain you can afford. Being overinsured makes it difficult to maintain payments on your policies and ultimately leads to wasted money.
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Set up automatic drafts for your policy premium payments, and schedule payments for times when you know there will be money in the account. More than one policy has wound up lapsed for nonpayment because a check was written but not mailed or because the payment was scheduled for the week before payday.
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Read your bank account and insurance statements regularly. The bank statement will confirm that your premium was withdrawn on time. The insurance statement, and any other communication from your insurance company, will alert you to any problems with your policy.
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Contact your insurance company immediately if you do have a lapse in coverage. In most cases, you can continue your insurance as if there was no interruption if you bring your accounts to current within a few months. This won't help you if you suffered a loss during the lapse but will allow you to maintain your policy without restarting at an escalated rate.
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Review each of your insurance policies annually to confirm that they still fit your needs. Except for life insurance -- which is almost always more advantageous to keep in force continually -- shop around every few years to look for better deals. Even if you don't intend to leave your current provider, you can use that information to negotiate a better price.
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Tips & Warnings
It's especially important to maintain health insurance. In most states, a gap in health insurance can permit a new insurer to disqualify coverage for preexisting conditions. Federal Consolidated Omnibus Budget Reconciliaton Act (COBRA) laws help you maintain health insurance even if you no longer work for the employer who provided your health insurance coverage.
