When the bill comes in the mail to pay your insurance premiums, this should trigger a knee-jerk reaction to review your policy. Insurance policies are living documents, which means they can be changed to accommodate changes in your lifestyle or circumstances. Many consumers don’t understand what coverage they have, and could be spending more than they need. Reviewing your insurance premiums should be done annually, just like getting a physical or going to the dentist. Failure to do so could result in more headaches down the road.
When your homeowners insurance is up for renewal, it’s important to review each piece. Even if you haven’t made any significant developments or improvements to your home, it is possible that other changes have occurred that your insurance agent should know about. Perhaps there was a flood, landslide, or damaging hail storm. Changes in the real estate market may affect the current policy or changes in lifestyle, living situation, or income are all factors to consider when reviewing your homeowners policy.
Auto insurance policies need to be reviewed to ensure that you have adequate coverage and protection for all drivers. If you have a new driver on your policy, it might be a good time to increase coverage. In addition to adding or changing the vehicles on your policy, it is important to review your driving habits. Are you driving more or less this year compared to last year? Will you have any upcoming road trips that may require additional coverage? If the value of your car has dipped below $3,500 it might be a good time to ditch the collision coverage and go for liability only. Taking the time to review these aspects each year will save you money and give you peace of mind.
Reviewing your life insurance policy should involve a look back at the year and the responsibilities and roles you hold. If there have been any additions to your family whether that be a new baby or elderly parents moving in, it’s important to increase your life insurance to accommodate the care of all individuals who depend on you. Any changes in health, activity or stress levels might also be reasons to review and perhaps change your life insurance policy. It is generally not a good idea to reduce your life insurance policy. Even in situations where there is job loss, divorce, or changes in family circumstances, there will be individuals who will be at a financial loss if you are no longer there, so it is important to provide for those unforeseen circumstances by reviewing and renewing your life insurance each year.
When small business owners are focused on the day-to-day activity of a growing business, it can be hard to realize all the small changes occurring that may affect insurance rates. Perhaps you have purchased new equipment, additional vehicles, or developed new products or services. On the other hand, if your business is struggling and has lost money, you may want to lower your policy limit in order to accommodate a reduced value. This will also reduce your premium and save you a little money.