As we soon head into a new year, you likely have a laundry list of new resolutions and commitments. Despite often being overlooked, one of your yearly activities should be a review of your current insurance policies and plans. You never get the most bang for your buck by picking a plan and forgetting about it, so today, we hope to teach you why an annual review should be at the top of your list heading into the new year.
Life Changes Impact Coverage Needs
Life is a journey filled with significant milestones, each bringing its own set of changes and challenges. Getting married, welcoming a new member into the family, stepping into homeownership – these pivotal moments have the possibility to reshape your insurance needs completely. When you tie the knot, for instance, your combined assets and shared responsibilities may call for a reevaluation of your coverage. Similarly, the joy of parenthood introduces the need to secure your child’s future, potentially adjusting your life insurance requirements. Even seemingly minor changes, like a career shift, can have implications for your insurance policies. While you probably have a lot on your mind right after these events occur, a yearly review is the perfect time to sit down and think through your current insurance needs.
Insurance Policies Benefit from New Discounts
In the dynamic insurance world, staying informed about the latest discounts and policy features through discussions with an insurance agent can yield substantial financial benefits. Insurance companies continuously innovate, offering new discounts that can significantly lower your premiums. For homeowners, this could mean savings for implementing safety measures or upgrading home systems. Car owners might find discounts for advanced vehicle safety features or for maintaining a safe driving record. Additionally, bundling different types of insurance with the same provider can unlock multi-policy discounts. Regularly reviewing your insurance policy ensures that you are taking full advantage of the cost-saving opportunities and enhanced protections available to you.
Understand Premium Fluctuations
Premiums can vary due to a confluence of market trends, economic factors, and personal circumstances. Broader economic changes, like inflation or shifts in the cost of healthcare, can directly influence the cost of insurance premiums year to year. On a personal level, changes in your life situation – be it a new home, a different vehicle, or altered health conditions – can impact the cost of your insurance. Instead of just adjusting your insurance needs due to these changes, you should also look at how your current plan price changes, shopping around if your provider increases your bill too much. This proactive approach allows you and your family to anticipate and adapt to cost variations and maintain optimal coverage at the most reasonable cost.
Reviewing Insurance Policies Avoids Being Underinsured or Overinsured
Striking the right balance in your insurance coverage allows you to avoid the pitfalls of being underinsured or overinsured. Underinsurance leaves you vulnerable in times of crisis. If an unfortunate event like an accident or natural disaster occurs, the coverage may fall short of actual needs, leading to significant out-of-pocket expenses when you are hurting most. On the other hand, overinsurance results in paying for more coverage than necessary, which translates to unnecessary financial expenditure without added benefit. This often occurs when policies are not regularly reviewed and adjusted according to current needs and asset values. Conducting annual insurance reviews is the key to ensuring that your coverage accurately reflects your current situation.
If you are looking to conduct a review of your current insurance policies and plans, Anderson & Associates Insurance Group is ready to help.
