Your Changing Insurance Needs
Your changing insurance needs and 10 questions to ask your insurance agent or company
What You Should Know
- Three out of five homes in the United States are underinsured by at least 20 percent of their full value, according to a 2018 study by an analytics firm.
- A complete review of your home and auto insurance policies is recommended at least once a year to make sure you have the coverage you need.
- Keep a detailed home inventory of all your possessions, and make sure you keep your home inventory up-to-date if you add valuables, such as new furniture or electronics. And don’t forget to add new drivers and vehicles to your auto policy.
Change is constant in our lives – our children become teen drivers, cars are replaced, families grow, homes increase in value, even our climate is changing resulting in more natural disasters – so it’s smart to make sure your insurance policies are keeping up with your life, because the worst time to learn what your insurance covers and does not cover is after the damage is done.
NW Insurance Council recommends talking with your insurance agent or company representative to review your insurance policies at least once a year, or whenever big changes – or even smaller ones – take place in your life.
To help get you started, here are 10 questions to ask your insurance agent during your annual insurance policy review:
1. How does my insurance coverage work? What is covered and what is excluded in my Homeowners policy?
Now is a good time to ask how your insurance coverage works and what is and isn’t covered. Know your deductibles and ask what your policies don’t cover so you can decide whether you want other types of insurance as well. For example, damage from floods, earthquakes, landslides and sinkholes typically are not covered under a standard homeowners policy but can be purchased through separate policies.
Make sure you know the monthly cost of your coverage and ask about ways to save on your premiums through higher deductibles or discounts. Things like smoke detectors, alarm systems and bundling auto and home policies under a single company can help reduce your premiums.
Too many homeowners believe that the coverage limits of their Homeowners insurance policy are linked to the market value of their home. Make sure you have enough coverage to completely rebuild your home and replace your belongings in the event of a disaster. If you’ve made significant improvements to your home such as expanding a kitchen or adding a new room, you may now be underinsured and will need more protection. Ask your insurance company or agent about “replacement cost coverage”, which can guarantee your entire home and contents will be restored to original condition if destroyed, even if costs have risen over time.
Homeowners insurance offers limited coverage against losses for expensive items, such as jewelry, fine art or high-end sports equipment like bicycles or golf clubs. Special coverage, called a Floater or Endorsement, can be purchased in addition to your Homeowners or Renters policy to cover the full value of your jewelry or other expensive items.
The maximum amount the insurance company will pay in legal bills and damages if you are sued is shown in the liability coverage section of your policy. If a visitor slips and falls in your home, make sure you have enough coverage for potentially extensive medical bills and legal bills. Your agent can help you determine the right limit of liability to purchase. You may want to consider purchasing an Umbrella Policy to protect your family’s assets.
If your teenage children have started driving, it’s generally less expensive to add them to your own Auto Insurance Policy rather than buy separate policies for them. If they will be driving their own vehicles, consider insuring them with your company so that you can get a multi-policy discount. Choose the vehicles carefully. The type of car a teen drives can significantly impact the price you pay for insurance. And if you’re thinking of simply not reporting your teen driver to your insurer? As a non-disclosed driver, your teen may have less coverage than your policy provides to you – leaving you potentially on the hook personally for liability for injuries or damage after an accident.
If your kids are heading off to college, there are a few things to consider. While they live on-campus in a dorm, their personal belongings are likely covered by your homeowners or renters insurance policy, but you may need higher limits if they have expensive items like high-end laptops or bicycles. If they live off-campus in an apartment or home, they’ll need their own Renters policy to protect their belongings from theft, fire or other covered loss. And if they leave their car (or yours) at home, you can likely claim significant savings on their auto insurance because they are “students living away.”
Switching jobs or experiencing a change in your salary can alter your insurance needs. If your new employer doesn’t provide as much Life Insurance protection as you had in your old job, you can replace the lost coverage with an individual Life Insurance policy. If you retired and no longer commute to work, the reduced mileage could reduce the cost of your auto insurance premiums.
You may qualify for a discount on your Auto Insurance if you’ve recently married. If you and your spouse insure your vehicles through two different companies, consider insuring both under one policy. Consider updating your Homeowners Insurance to protect new valuables such as jewelry and wedding gifts. If you’ve recently divorced, you’ll need separate Auto and Homeowners policies.
Knowing your agent’s process for filing a claim and the typical timeline for reimbursement will help reduce stress during the claims process. Also, ask your agent if they are available outside of business hours, or if the insurance carrier can be contacted online at any time.