Every year thousands of families end up facing an emergency of some sort that brings to light a startling realization: they are underinsured.Most of these people thought that they had adequate insurance, that they would be protected in their time of need.Participating in an annual insurance review could have spared numerous people a great deal of money, not to mention reduced stress and increased peace of mind!
For example, consider the family that added on to their home and didn’t increase their homeowner’s policy to ensure that the new addition was covered.What happens then when the fire comes that destroys the home and they are unable to afford the necessary repairs?Or maybe someone got married or had a child and didn’t update their health coverage to include the new family members and a serious illness or accident occurs and the family can’t afford the financial burden of the enormous medical costs?
Unfortunately, many people today are too hasty in selecting their individual insurance policies for things like home, auto, life and health, and they further complicate things for themselves by never updating their policies as their lives change.When we experience life changes, our insurance policies need to change as well.
A good time of year to sit down review insurance policies is at the beginning of the year.Doing an annual insurance review should be part of everyone’s New Year Resolutions.So exactly what changes should be reported to an individual’s insurance agent?What areas should a good annual insurance review cover?What questions should we be asking ourselves every year?Consider the following questions:
Do I have an up-to-date inventory of all my possessions?All households should have an inventory list and either dated photographs or video of all household items or other valuables that might be covered under an insurance policy.Store the inventory list, any receipts pertaining to covered items, and the photos or video in a safe deposit box, water/fireproof safe, or other secure location.
Have I notified my insurer of any and all home improvements?Any improvements that will add to the value of your home need to be reported in order to be covered.This might include structural additions such as an attached garage; installation of a swimming pool; substantial renovations such as a new roof or building exterior; installing central heating or air conditioning.Even the purchase of some dog breeds could cause trouble when filing certain homeowner claims.Be sure you check with your agent for specific items your insurer requires notification for coverage changes or increases.
Has your marital status changed?A marriage might qualify you for a discount on your auto policy, or you might consider merging policies for auto, home, life, or health insurance.You should consider additional insurance coverage for wedding rings or valuable items received as wedding presents.If you got a divorce during the year you will want to separate your policies from your ex’s, or you might be moving to a smaller residence that doesn’t require as much coverage as your previous home.
Did you have a baby?If you have added a child to your household either by birth or adoption you might want to consider changes to any existing life insurance and health insurance policies to include the new family member.
Do you have a new teenage driver in your home?Teenage drivers are often more expensive to insure than other adult members of the family.Your insurance agent should be able to help you determine the most cost-effective way to add insure the new driver, whether adding him or her to your existing policy or setting up a new policy.Be sure to ask about things like “good student” discounts that are often available to students with at least a “B” average that can help offset the increased costs of insuring the young driver.
Have you changed jobs or experienced a significant raise in salary?If you changed jobs you might have had a life insurance policy that was in place with the former employer.Check with your carrier to see if the policy can be changed over independently or if a new policy needs to be set up.Do not cancel any existing life insurance policies until a new policy is in effect.If you experienced a salary increase make sure you increase your benefit amount to reflect the change.
Your insurance agent should be willing to take the time to sit down with you to go over these questions and others to ensure that your insurance coverage is keeping up with your life.If it’s been a while since your last insurance review don’t wait until the first of the year; call your agent now to schedule a time to review your policies!Don’t take the risk of being left underinsured in an emergency.