Is my Insurance Legal

Contracts are a mystery to the general public. Nobody seems to read them until there is some kind of a problem, and then they realize what it is they have actually agreed to. Nothing should be this way, especially not something as important as your insurance. Because insurance contracts are full of legal jargon and are typically very difficult to understand, no one reads them either. It is this problem that led to so many homeowners affected by hurricane Katrina to be left without coverage from their home insurance. The insurance companies, for the most part did nothing illegal, according to the contracts that were accepted by the homeowners. However, because insurance is difficult to understand sometimes, there should be a way to check on your insurance contract and see if it is indeed legal. Here are some tips to help you find out.

Department of Insurance: Each state has a department of insurance or something similar. It is the job of this department to license those people who sell insurance, and to review the practices and contracts of the insurance companies doing business within the state. If an insurance sales person, or an insurance company do something questionable, than it is up to the department of insurance to investigate and impose punishment as needed. It could be revocation of a license or more.

State insurance requirement: Each state has a code or set of laws in place that dictate the minimum that an insurance policy must do or provide. You should be able to contact the department of insurance in your state and request a list of these minimums. Once you have this list, compare the requirements to your policy. If you notice a portion of your policy that seems to not meet the minimums, note it and report it. It wouldn’t be a bad idea to approach your agent before reporting your question to the department of insurance, just to get any clarification that he or she might be able to offer.

Generally speaking, any insurance contract that you enter into, with a provider who is registered with the state department of insurance should be legal. That’s not to say that they all are, but if they are registered with the state, they should be. If you have questions about your policy being legal, consult the department of insurance, it is there to protect you and regulate the insurance companies to keep them in line. And remember, if you feel uncomfortable with your policy, there are many law abiding companies out there that would be happy to assist you.