Youve seen the ads. Some insurers promise coverage for extremely low insurance rates, making a big fuss over the great price but saying little about what youll get for that price.

Theres nothing wrong with wanting a deal, but its important to remember that if something goes wrong, and you want to turn to your insurer, youre going to want some meaningful help. After all, you get what you pay for, as the saying goes, and it may turn out that you wont get much of anything.

The next time you buy into a cheap insurance plan, or if you have a plan known for its rock-bottom premiums, youd do well to review the risks you may be taking - and take another look at that policy.

Why Your Cheap Insurance May Be Worthless

It might not be real. Numbers, especially recent numbers, are hard to come by, but an updated 2015 report from the National Association of Insurance Commissioners found that between 2000 and 2002, the US Government Accountability Office identified 144 fake insurers nationwide that sold fake health insurance to more than 200,000 policyholders, resulting in more than $252 million in unpaid claims.

The NAICs report also said there are still many fake companies that sell auto, homeowners, rental, life, disability, prescription drug and long-term care policies. And its evidently a global problem. This year, in England, the Association of British Insurers warned consumers that unauthorized insurance advisers - also known as ghost brokers - were selling bogus car insurance policies.

Youre likely underinsured. Sean Scott, a restoration and general contractor in San Diego and author of The Red Guide to Recovery - Resource Handbook for Disaster Survivors, says many people have been burned by cheap homeowners insurance policies. That doesnt mean your insurance isnt the real thing; even if you have the most ethical insurer in the world, if your premiums are really cheap, your policy may feel fake because there are so many restrictions that barely anything is covered.

Scott offers the example of wildfires that swept through Southern California in 2003 and 2007. He worked with many of the homeowners, but he couldnt help several because of their lackluster insurance policies.

Many of the survivors found themselves unable to rebuild their homes due in large part to being sold cheap, bare-bones homeowners insurance policies, which in many cases didnt allow enough coverage to rebuild the home or lacked essential endorsements to adequately cover things like building code upgrades, additional living expenses, debris removal and landscaping, Scott says. To this day, there are vacant lots all over the region that are stark reminders of [the] disaster survivors who evolved into disaster victims simply because they were underinsured.

Scott remembers how some of his friends lost their homes in the Witch Creek Fire of 2007, in San Diego County. They had a good insurance policies and were able to rebuild.

However, their next-door neighbors didnt fare as well, Scott says. One neighbor on one side got into a war with their insurance company, lost their home and moved away, and the neighbor on the other side became distraught and committed suicide.

Your claims may be paid at a snails pace. Granted, this can happen when youre paying big bucks for insurance. But if your payments are going to El Cheapo Insurance, it seems logical that the company specializing in getting the lowest possible premiums from its customers might be a little stingy when it comes time to return some of that money.

That seems to be what Kyle ODell encountered. ODell is a managing partner at ODell, Winkfield, Roseman amp; Shipp, a wealth management firm in Englewood, Colorado. In his case, he faced a problem with someone elses cheap insurance. In 2012, a semi truck drove into his lane and hit his car. Nobody was hurt, but ODells car was banged up.

We decided to exchange information quickly and get off the shoulder of the road, and not wait for a police officer to write the driver a ticket, ODell says.

That was a rookie mistake, leaving a wreck without a police report, although sometimes theres nothing you can do about that; often, the police wont come to the scene of a traffic accident if nobodys hurt. Still, the truck drivers insurer, one that often touts its low rates, ODell says, balked at paying for the damage because the police didnt come to the scene.

So, ODell had little choice but to pay for the repairs himself, which came to $2,000. He kept hounding the insurance company for reimbursement, however, until he was finally paid back six months later.



Following a winter that caused an estimated $2.4 billion in losses in the Northeast, a recent spike in Massachusetts home insurance premiums is drawing the scrutiny of lawmakers and consumer advocates alike.
Im keeping an open mind here, so Im stopping short of saying any particular rate increase is excessive, said state Sen. Michael Barrett, D-Lexington, chairman of the Senate Committee on Post Audit and Oversight. But whats unsettling is the lack of an even fight between those who would like to maximize rate increases and those who would like to minimize them.
Barretts committee is holding a hearing Sept. 22 to publicly examine the premium hikes and the review process the Division of Insurance used in approving new rates. Under state law, rates cannot be excessive, unreasonable, inadequate or unfairly discriminatory.
On the heels of a historically severe winter that saw insurers pay out hundreds of millions in claims, state regulators this spring and summer effectively approved average rate increases from several major insurers some topping 9 percent in a process primarily conducted behind closed doors.
Rising rates
Unlike consumer rates for auto insurance, electricity service and other state-regulated industries, a filed rate increase for homeowners insurance doesnt automatically trigger a hearing in Massachusetts. After new rates are filed, they can take effect without a record of an explicit affirmative approval from state regulators.
In total, 13 insurers, including some of the states largest, have had rate increases this year, according to the state Division of Insurance.
With more than 214,000 customers in Massachusetts, MapFre, the states largest home insurer, raised its average rates by 8.9 percent effective Aug. 1. Boston-based Safety Insurances average rates are rising by 9.1 percent, while Plymouth Rocks rates are increasing by an average of 7.7 percent. USAA is raising its average rates by 6.3 percent, according to the Division of Insurance.
In recent years, insurance companies rate increases have typically hovered in the 2 to 3 percent range in Massachusetts.
Collectively, the new charges will add approximately $100 to annual insurance bills for many Massachusetts homeowners, who typically pay approximately $1,200 per year for home insurance.
Mark Townsend is an insurance broker and co-owner of Cullen and Townsend Insurance Agency.
Although his offices are in Plymouth and Quincy, Townsend said he has clients who live in Taunton, Raynham and Lakeville.
Townsend said the four companies he represents have yet to pull the trigger and increase their home-insurance rates. But he said its inevitable that increases will put in place.
I do think theyre coming, he said.
Townsend said the reason is simple: Last years winter resulted in losses that were unprecedented.


Nearly 9M Got Insurance In First Marketplace Year

By Julie Rovner

Wed, Sep 16 2015

The percentage of Americans without health insurance dropped by nearly three percentage points between 2013 and 2014, according the US Census Bureau, from 13.3 to 10.4 percent. Put another way, 8.8 million more people were insured in 2014 than the year before.

The annual study from Census is considered the definitive measure of health insurance, although a change in the way health insurance questions are asked make this year's report comparable to 2013 but not earlier years.

Census officials, however, point out that a different annual survey that has asked health insurance questions consistently show this to be the biggest drop in the uninsured since at least 2008.

Others say the sizable increase in Americans with insurance - due in large part to the implementation of the federal health law - is unprecedented since the creation of Medicare and Medicaid 50 years ago.

"It's probably the biggest drop ever," said Paul Fronstin, director of health research at the Employee Benefit Research Institute, who has been studying the uninsured since 1993.

"For the general population, this is a historic drop," agreed Diane Rowland, head of the Kaiser Family Foundation's Commission on Medicaid and the Uninsured. (Kaiser Health News is an editorially independent program of the Foundation.)

More importantly, said Rowland, "the gains are exactly where the biggest problems were," meaning the largest increases in coverage were in those groups with traditionally the highest rates of uninsurance - younger, working-age adults and people with low and moderate incomes.

Despite the gains, the Census study found that 33 million people are without insurance.

While the gains in insurance coverage were widespread, they were not equal in every category. Not surprisingly, among types of coverage, the biggest increases were in people covered by Medicaid (up 2 percentage points to 62 million people) and people buying their own health plans (up 3.2 percentage points to 14.6 million people). Expanding Medicaid and making private insurance easier to purchase by those without employer coverage were key focuses of the health law.



Do 95 percent of Oregonians really have health insurance?

It's the number that had been touted many times. Amid the embarrassment of Oregon's troubled implementation of the Affordable Care Act, it rapidly expanded Medicaid, shrinking the state's uninsured population to 5 percent.

At least, that's what a state funded report from the Oregon Health amp; Science University found about a year ago.

Ever since, state officials and politicians brought up the figure while discussing the fate of Cover Oregon and the future of the state's Obamacare programs.

Sen. Laurie Monnes Anderson, D-Gresham, said in December during an interim committee meeting discussing the closure of Cover Oregon: "Having 95 percent insured is such a feather in our cap."

But this week, the US Census Bureau released its first comprehensive report on health insurance coverage in 2014, as in post-Obamacare, and it significantly dampened Oregon's health-reform bright side.

It showed that Oregon's uninsured rate in 2014 was 9.7 percent, not 5 percent. That's a big difference.

So, which is right?



BC, Punta Gorda, Fla.

Dear BC: Is this a question or a complaint?

This insurance stuff is terribly complicated, and your lads numbers dont make sense to me. He must counsel with an insurance professional for the straight skinny. But the tables are turning to patients advantage, and medical costs could fall significantly in the coming decade.

If your son and his wife were not to purchase health insurance, the penalty would be either 2 percent of their annual income above $20,300, which is about the cost of Obamacares bronze plan, or $650 for the year, whichever is higher. The maximum penalty per family is $975. How ducky! Therefore, many families are buying high-deductible health care plans, or HDPs, which only cover catastrophic illnesses, for $50 to $70 a month. So $4,000 a year sounds out of line.

Because HDPs are enormously cheaper than the plans of yesteryear, 38 million Americans have signed up, and 86 percent of employers now offer HDPs, compared with 38 percent in 2012. HDPs are becoming increasingly popular, and this trend will continue as Obamacares 40 percent tax on "Cadillac plans" takes effect. As millions of Americans move into HDPs, health care spending will change the way patients deal with doctors, hospitals, rehab centers, medical equipment supply companies, imaging centers, etc. And there will be significant changes in how the medical community relates to patients.

In a typical year, HDP consumers pay almost all of their health care expenses --the costs for X-rays, fixing a broken finger, stitching a cut, treating a concussion, blood work, physicians exams et al. Because the consumers are spending their own money, theyll shop prices for CT scans, EKGs, day surgeries, heart stents, colonoscopies, etc. Previously, these services were paid by insurers, so patients didnt give a fig about costs, believing they were spending the insurance companies money.