It is time for year-end reviews. Is your insurance coverage included on the review list? If not, it should be. Use this insurance checklist as a starting point to review your policies and address any gaps in your coverage, as well as potential cost savings.
- Change in Value – If your house has gained in appraisal value, the amount of your policy may not be enough to rebuild your home completely. Improvements or renovations that increase your home's value may require adjusting your insurance coverage through the same logic.
- Extended Coverage – Do you have jewelry or other valuables that you would rather insure on your homeowner's policy than insure separately (or not at all)? Add any riders you need, and check the coverage limitations and adjust them if they are inadequate.
- New Discounts – Insurers add and change discounts all the time, and changes in your situation may qualify you for different savings. Check with your insurer to see if you qualify for any new discounts. Don't forget indirect items lowering the risk on your home, like the fire department putting in a nearby hydrant.
- Life Changes – Birth, death, marriage, divorce, job loss and other family status changes may require adjustments to your policy. Of course, if you have experienced death personally, someone else will be taking care of that adjustment for you.
- Changes in Income – If your income has increased significantly, you may need to increase your coverage for your family to maintain their standard of living should you pass away. Conversely, if your income is lower, you may not be able to afford your current policy and will have to work with your agent to find a suitable adjustment.
- Changes in Life Insurance Policies and Provisions - Occasionally, life insurance carriers introduce new and innovative features that may be of benefit to consumers. Desirable options may be introduced to those of us with existing coverage when we schedule an annual insurance review. One type of option that is proving desirable for many has been what are called "living benefits" that allow the death benefit to be triggered for such things as long-term care expenses, critical, chronic, and terminal illnesses while we are still alive. Some of these options did not exist years ago.
- Retirement/Estate Plans – Changes in your retirement needs or estate plans may involve your life insurance policies. Adjust them accordingly, if you can – whole life and certain other policies do not have much capacity for adjustment.
- New Drivers – Has your teen started driving? You will need to get them a policy of their own or add them onto yours. Check your healthcare plan for discounts on Xanax while you are at it. Search under "parent of teen driver."
- Car Status – As your car ages, you may be able to drop or change elements of your coverage, such as the collision and comprehensive (C&C) portion of your policy. C&C becomes less useful as the annual premiums start to approach the current value of your car.
- Discount Status – Auto insurance is particularly filled with potential discounts. Check with your insurer to see if you qualify for new discounts based on any changes in status or driving habits.
You need an annual health insurance review as well (thanks to ObamaCare, many of us have no choice), but that scope goes well beyond the space we have here. If you receive insurance through an employer, it is wise to check with your employer to review any changes on your part or theirs that require adjusting your coverage.
If you have any categories of less common insurance, do not forget to check those policies as well.
A common thread to saving money under all of the insurance categories is to shop around. You may find a better deal, or at the very least find leverage you can use to negotiate a better deal with your existing insurer.
Even if you make no changes at all, at least you have reviewed your policy and you feel confident in your coverage. Your peace of mind is worth it. If you have any questions about insurance for your specific situation, try asking one of the experienced MoneyTips professionals.