An annual insurance review might sound like another task on a long to-do list, but it’s one of the most important financial check-ups you can do. Life changes quickly, and the insurance that was perfect for you last year might leave you exposed today. Taking a small amount of time to review your policies ensures your coverage keeps up with your life, protecting what matters most without overpaying.
Why Bother with an Annual Review?
Insurance is not a “set it and forget it” product. Your needs evolve, and the insurance market does too. An annual review helps you confirm that your policies for home, auto, life, and health are still the right fit.
Without a regular check-in, you could face several risks. You might be underinsured, leaving you financially vulnerable after an accident or disaster. Conversely, you could be overpaying for coverage you no longer need. A yearly review puts you back in control, ensuring your safety net is strong and cost-effective.
Key Areas to Focus On
Organize your review by breaking it down into manageable steps. Gather all your policy documents, and let’s dive into the specifics.
1. Assess Your Coverage Limits
Your coverage limits determine the maximum amount an insurer will pay for a covered claim. Are these limits still adequate?
- Home Insurance: Have you made significant home improvements, like renovating a kitchen or adding a deck? These upgrades increase your home’s replacement cost. Your dwelling coverage should be high enough to rebuild your home completely after a total loss. Also, review your personal property coverage to ensure it reflects the value of your belongings.
- Auto Insurance: Consider the liability limits on your auto policy. These cover bodily injury and property damage you might cause to others in an accident. State minimums are often dangerously low. If you cause an accident with serious injuries, medical bills can easily exceed a $50,000 limit, leaving you personally responsible for the rest. Many financial advisors recommend carrying at least $100,000 per person and $300,000 per accident.
- Life Insurance: The purpose of life insurance is to provide for your dependents if you pass away. Has your income increased? Have you taken on more debt, like a larger mortgage? Your death benefit should be sufficient to cover these obligations, replace lost income, and fund future goals like a child’s education.
2. Update Your Personal Information
Outdated information can cause significant problems when you file a claim. During your review, check that the following details are correct across all your policies:
- Address: If you’ve moved, your home and auto insurance rates will change. Failing to update your address could lead to a denied claim.
- Vehicle Information: Have you sold a car or bought a new one? Make sure your policy lists the correct vehicles. The make, model, and year of your car directly impact your premium.
- Named Insureds: Ensure all relevant household members are listed correctly on your policies. For example, if a child just got their driver’s license, they need to be added to your auto policy.
3. Account for Major Life Changes
Major life events are the number one reason to adjust your insurance. If any of these happened in the last year, your coverage needs a second look.
- Marriage or Divorce: Getting married usually qualifies you for discounts on auto and home insurance when you bundle policies. Getting divorced requires separating those policies and ensuring each person has adequate individual coverage.
- Buying a Home: First-time homebuyers need a new homeowners policy. Your mortgage lender will require it, but the coverage you choose is up to you. Don’t just get the minimum; select a policy that truly protects your investment.
- Having a Child: A new baby is a joyful reason to increase your life insurance coverage. You now have a dependent who will rely on your income for years to come. It’s also a good time to review health insurance to ensure your plan offers the best benefits for your growing family.
- Starting a Business: If you started a home-based business, your standard homeowners policy likely won’t cover business-related liabilities or property. You may need a separate business owner’s policy or a special endorsement.
4. Compare Insurance Company Options
Loyalty to an insurance company doesn’t always pay off. Rates can change, and competitors may offer better coverage for a lower price. An annual review is the perfect time to discuss other quotes with our independent agency team, who can shop your coverage with more than one company.
When comparing, don’t just look at the premium. An apples-to-apples comparison means matching coverage limits, deductibles, and endorsements. A cheaper policy might have a much higher deductible or exclude certain protections you currently have.
5. Ask Our Team About New Discounts and Benefits
Insurers are always updating their offerings and discount programs. You might be eligible for savings you didn’t qualify for last year.
Common discounts include:
- Bundling: Combining your home and auto policies with the same company.
- Good Driver: Maintaining a clean driving record for a certain number of years.
- Safety Features: Having anti-lock brakes, airbags, or an anti-theft system in your car.
- Home Security: Installing a burglar alarm or smoke detectors.
- Good Student: For young drivers on your policy who maintain a high GPA.
You might be surprised by what discounts you can find.
Your Action Plan for a Successful Review
Feeling ready to get started? Here’s a simple checklist to guide you.
- Schedule It: Block out an hour on your calendar. Treat it like any other important appointment.
- Gather Your Documents: Collect your current policy declarations pages for home, auto, life, and any other insurance.
- Make a List of Changes: Note any major life events, home improvements, or changes in assets from the past year.
- Contact Your Agent: Reach out to our team to walk through your list of changes and ask them to review your current coverage limits.
- Request Quotes: Ask for comparative quotes from our team to review against your current policy.
- Make Your Decision: Choose the policy that offers the best combination of coverage, service, and price.
An annual insurance review is a proactive step toward financial security. It empowers you to make informed decisions, ensuring the protection you’re paying for is the protection you actually need. Don’t wait for a claim to happen to find out you have a gap in your coverage. Take control today.