The criteria for evaluating your insurance

We all make New Year’s resolutions, whether they’re to lose weight (again) or quit smoking (finally). Maybe you want to get more organized or rid yourself of some other bad habit.

Well, there is another resolution you might not have thought about … conducting a review of your insurance policies. Why is this so important? Many things can change in a year, and it’s a good idea to look at your policies to make sure they still fit your needs. Perhaps you can even identify ways to save money.

3 things you should review for each policy:

• Coverage amounts

• Premium amounts

• Deductible amounts

Now Let’s look at the different types of insurance and what could signal you need to make a change.

6 things to review in your homeowner’s policy

1.  Determine if your policy covers replacement cost or actual cash value for items lost. Both determine how much money you will receive if there is damage to your property or belongings, but they work in different ways. In general, replacement cost is better, but in either case, you need to review the coverage amount to account for changes in the market, such as the increased cost of building materials or things like appliances, televisions, computers, and furniture.

2.  Determine if you need to add flood insurance. Remember, flood damage is usually not covered under a standard homeowner’s policy so it must be bought separately. In some states, you might be required to purchase it.

3.  Determine if your policy covers other things you might need. Insurance policies often exclude certain things. Flooding (above) is just one example, so you must understand what’s covered and what’s not. For instance, do you live in an earthquake- or hurricane-prone area? Do you need sewer backup insurance?

4.  Determine if your deductibles are still adequate for your needs. If you did any home remodeling or upgrades, put in a pool, or replaced the roof you may need more coverage. Also, you can often save money by choosing a higher deductible.

5.  Determine if you have enough liability insurance. A homeowner’s policy covers damage to your property. Liability insurance protects you in the event someone else is injured on your property. This could be anything from a construction worker who gets hurt while putting in a new addition to a neighbor who trips and falls over a hose in your driveway.

6.  Determine if you qualify for any discounts. This is something many people forget to do. There are many ways to save money on your homeowners insurance, including putting in high impact windows, installing a security system, and bundling other insurance policies (such as auto) together.

3 things to review in your auto policy

Whether you insure a car, truck, RV, motorcycle or boat, you need to sit down and review each policy.

1. Determine if the coverage level is adequate. It may be that you need more or less coverage; for instance, if you bought a new car or your child turned eighteen and left for college. If you moved to a different part of the city or state. Any of these circumstances might affect your coverage needs. You will also want to ensure you have enough liability insurance in case you are responsible for injuries to someone else.

2.  Determine if your deductible amounts are adequate. One way you can lower your deductible and save money is by paying more out-of-pocket. So, take a look at your financial situation and determine if you can swing more of the costs.

3.  Determine if you might be eligible for discounts. Just like with your homeowner’s policy, there are things you can do to lower your premium. Perhaps you took a new job that reduced your commute or you joined an alumni association or other organization that offers discounts. Again, you might also look at bundling different policies together for more savings.

Resolve to review your life insurance

Life insurance may be a forgotten type of coverage, but it is very important to review this policy on an annual basis as well. There may have been big changes in your life in the last year. Here are 4 reasons you might need to make a change…

1.  Your family status has changed – If you had (or adopted) a new baby or you’re now caring for a disabled or elderly adult, you may need to adjust the amount needed to protect your family in the event of your death.

2.  Your health has changed – Your health may have improved since you signed up for the policy. If you’ve stopped smoking, you may also be able to lower your premiums. 

3.  Your marital status has changed – If you got married or divorced in the last year, this could definitely affect your life insurance, and you will probably need to delete, add or update beneficiaries. 

4.  The beneficiaries have changed – This is related to #3, but may also include other circumstances, such as the death of a beneficiary. Determine if you need to add or remove a beneficiary for any reason and make the change now.

As the New Year rolls around, now is the time to make an assessment of your insurance plans and needs. If you have any questions and are looking for answers, contact Avante Insurance today.