Courtesy of iii.org
Coverage needs change as circumstances in our lives change; an annual insurance review will ensure you have the proper coverage for your needs and budget.
Our insurance needs change as circumstances in our lives change, which is why we recommend doing an annual insurance review. When you’re reviewing your insurance coverage, these ten questions can help you figure out whether you may need to talk to your insurance professional about making a change to your coverage.
If you have gotten married, you may qualify for a discount on your auto insurance. Couples may bring two cars into the relationship and two different auto insurance companies, so take the opportunity to review your existing coverage and see which company offers the best combination of price and service.
If you are merging two households, you may need to update your homeowners insurance. And you may want to consider increasing your insurance for any new valuables received, such as wedding gifts, and for jewelry, such as wedding and engagement rings.
After getting married, it is important to review your life insurance needs. If one spouse is not working, he or she might be dependent on the working spouse’s income; if so, reviewing life and disability insurance coverage is prudent. The spouse who is not working outside the home should also consider having a separate life insurance policy because, in the event of premature death, the services he or she provides for the household would need to be replaced, and that could prove costly to the surviving spouse. Moreover, even if both spouses are working, couples often make financial commitments based on both incomes so the loss of one spouse’s income due to death or disability could be financially devastating without adequate insurance.
In the other hand, if you got divorced over the past year, you will probably no longer be sharing a car with your former spouse and have likely moved to a different residence. If this is the case, you should inform your insurer as you will need to set up separate auto and homeowners policies.
If you have recently added a child to your family, whether by birth or adoption, it is important to review your life insurance and disability income protection.
If you are planning for your life insurance to match your survivors’ expenses after your death, the new child will no doubt add to those expenses, requiring more life insurance to keep your family secure. If you plan to save for your child's college education, life insurance can assure completion of that plan. And if you keep your current life insurance policy, don’t forget to update the beneficiary designations to include the new child.
It is generally cheaper to add your teenagers to your auto insurance policy than for them to purchase their own. If they are going to be driving their own car, consider insuring it with your company so you can get a multi-car discount. And choose the car carefully—the type of car a young person drives can dramatically affect the price of insurance. You and your teens should choose a car that is easy to drive and would offer protection in the event of a crash.
Also, encourage your kids to get good grades and to take a driver training course. Most companies will give discounts for getting at least a “B” average in school and for taking recognized driving courses.
If your teenagers move at least 100 miles from home—for example, to go to college—you can get a discount for the time they are not around to drive the car (assuming they leave the car at home).
If you had life and disability insurance through your former employer, and your new employer does not provide equivalent protection, you can replace the “lost” coverage with individual policies.
In the case of an income increase, you may have taken on additional financial commitments that your survivors will depend on. Make sure to review your life and disability insurance to ensure it is adequate to maintain those commitments.
If your income decreased, you may want to cut your life insurance premiums. Term life insurance is a good option, as the premium rates are very reasonable. And if you already have two or more policies you might be able to replace both with a single policy at a lower rate because you may reach a “milestone” amount of insurance. (For example, at many life insurance companies, $500,000 of insurance costs less than $450,000 because of the milestone discount.) But don’t drop existing life insurance until after you have a new policy in place.
If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don’t report the changes to your insurance company. An increase in the value of the structure of the home may require an increase to your homeowners insurance coverage limits.
And don’t overlook new structures outside of your home. If you built a gazebo, a new shed for your tools or installed a pool or hot tub, you should speak to your insurance professional.
If, as part of a renovation, you purchase furniture, exercise equipment or electronics, you may need to increase the amount of insurance you have on your personal possessions. Keep receipts and add any new items to your home inventory.
If you are searching for a vacation home or a second home you might retire to, make sure you research the availability and cost of homeowners insurance before you commit to the purchase.
The very factors that make a vacation home seem ideal, whether it is a waterfront property or a mountain retreat, can often introduce risks that make it costly and difficult to insure, such as proximity to the coast and the likelihood that it will be vacant for long periods of time.
In the event you have already bought a vacation home, don’t skimp on the insurance. The risk of theft or disaster is just as significant, if not more so, in a second home as in your primary residence.
If your new property is close to the water, be sure to ask about flood insurance. Damage to your home or belongings resulting from flood is not covered under standard homeowners insurance policies. Flood insurance is available from the National Flood Insurance Program (NFIP), as well as some private insurers, and is generally sold though private agents and brokers. You can ask your insurance professional whether your home is at risk for flood, or enter your address on the NFIP website to find out whether your home is in a flood zone. If you have a very valuable home, some homeowners insurers offer excess flood coverage over and above that provided by the NFIP policies.
A standard homeowners policy offers only limited coverage for highly valuable items. If you have made purchases or received gifts that exceed these limits, you should consider supplementing your policy with a floater or endorsement, a separate policy that provides additional insurance for your valuables and covers them for perils not included in your policy, such as accidental loss. Before purchasing a floater, the items covered must be professionally appraised. Keep receipts and add the new items to your home inventory.
If you are renting a home, your landlord is responsible for insuring the structure of the building, but not for insuring your possessions—that is up to you. If you want to be covered against losses from theft and catastrophes such as fire, lightning and windstorm damage, renters insurance is a good investment. Like homeowners insurance, renters insurance includes liability, which covers your responsibility to other people injured at your home, or elsewhere, by you and pays legal defense costs if you are taken to court.
Regardless of whether you are a renter or an owner, you will have the following options when it comes to insuring your possessions:
- Actual cash value pays to replace your home or possessions minus a deduction for depreciation.
- Replacement cost pays the cost of rebuilding or repairing your home or replacing your possessions without a deduction for depreciation.
Think carefully about what your financial position would be in the aftermath of a disaster, and make sure you have the type of policy that is right for you.
If you are a frequent carpool driver, whether it is to work, or ferrying kids to school and other activities, your liability insurance should reflect the increased risk of additional passengers in the automobile. Check with your insurance professional to make sure your coverage is adequate.
If you commuted regularly to your job, in retirement your mileage has likely plummeted. If so, you should report it to your auto insurer as it could significantly lower the cost of your auto insurance premiums. Furthermore, drivers over the age of 50-55 may get a discount, depending on the insurance company.
Courtesy of iii.org
There's a difference between an insurance company cancelling a policy and choosing not to renew it. Learn why your insurance might not be renewed
Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:
- You fail to pay the premium
- You have committed fraud or made serious misrepresentations on your application
- Your drivers license has been revoked or suspended.
Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).
There are a number of reasons an insurance company may choose not to renew a policy, and it may have nothing to do with you personally. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.
However, a nonrenewal can also be due to your record or your actions. Doing something to considerably raise the insurance company’s risk—like driving drunk—would be cause for non-renewal.
If you've been told your policy is not being renewed and you want a further explanation or think the reason is unfair, call the insurance company’s consumer affairs division. If you don't get a satisfactory explanation, contact your state insurance department.
Note that nonrenewal at one insurer doesn't necessarily mean you'll be charged a higher premium at another insurance company.
Courtesy of iii.org
Road rage incidents are not only dangerous, they are exempted from coverage by many auto insurance policies. Understand your risks and take precautionary measures to avoid being a victim—or a cause—of aggressive driving accidents.
Crowded highways and traffic backups at times cause drivers to lose control and become extremely aggressive. Road rage is a real problem that can lead to serious accidents or even incidents of violence on the road.
It's important to realize that road rage is listed as an exemption in many auto insurance policies. This is because any damage or liability stemming from aggressive driving isn't considered an accident but rather as having been caused by risky behavior.
Rather than risk paying the consequences of road rage—one of which may be not having your auto insurance claim paid—it's best to avoid a dangerous and costly aggressive driving incident in the first place.
- Stay as far away as possible. Slow down or change lanes if need be, let the driver pass you and give yourself room at intersections to drive away.
- Record a description of the car and note the license plate number if possible so that you can report him or her to the police for the sake of everyone's safety.
- Do not engage with or challenge the offender in any way. Ignore the driver's rudeness and don't give into the temptation to react in kind or you might escalate the risky behavior.
- Put your safety first. If an aggressive driver starts to follow you, keep your doors locked, and head to the nearest police station. Never stop and confront an aggressive driver.
- Leave plenty of time to get where you need to go. When you're in a hurry, your patience is short and you are much more likely to become aggravated.
- Remember other drivers are not annoying you on purpose. People make mistakes or they might be driving more slowly for a reason—they might be lost, or their sight might be impaired by sun glare.
- Don't use hand—or single finger—gestures other than a wave to someone who lets you into your lane.
- Don't tailgate slow drivers. Hanging on another car's back bumper is dangerous. If the car in front of you has to stop short and you rear-end it, the accident would be considered your fault.
- Don't honk your horn insistently. Leaning on your horn is a bad practice. While it might make you feel better to express your frustration in a traffic jam, it won't make anyone go any faster, it's annoying to other drivers and passengers and it increases everyone’s stress level, which may lead to more aggressive behavior.
- Never stop to confront another driver. It could lead to a dangerous situation for all concerned.