Insurance Changes to Consider in 2020
The New Year is the time when many people make resolutions and resolve to make positive changes in their lives. This is also a good time to take a look at your insurance coverages and ensure that there are no gaps. You never know what life will throw at you in the future, and it is important to make sure that you are adequately covered, and if you are not, what changes you may want to make.
Auto Insurance: A lot of people take their cars in for a regular servicing to perform maintenance and see if there are any problems that need to be addressed. But many of these same people pay their auto insurance premiums regularly for several years without ever checking to see if anything needs to be updated.
As life evolves, it makes sense to take a look at your car insurance coverages to make sure you have everything you need, and that you are getting the best deal. Some common changes that could necessitate updated coverages include:
- A teen in your household getting their driver’s license;
- A change in vehicles or the purchase of a new vehicle;
- A change in driving habits (i.e., driving more or less often than previously).
In reviewing your auto insurance, you may find that you have too much coverage in one area, not enough in another area, or that some coverages should be dropped altogether. For example, you may have a vehicle with collision insurance on it because you had to have this coverage when you first purchased the vehicle with a loan. But now maybe the loan is paid off in the car is 10 or more years old, in which case it may not make sense to keep collision coverage anymore.
Another thing to keep in mind is that there are numerous insurance carriers out there, and they all have a little bit different niche in the marketplace. Some provide very low rates for individuals with perfect driving records, but their rates may be extremely high for someone with just a couple of traffic tickets. Other carriers are not so competitive for drivers with clean records, but they specialize in providing more reasonable rates for high risk drivers. This is why it makes sense to shop around, especially when there are significant life changes that affect your driving and the vehicles you own.
Homeowner’s Insurance: Reviewing your homeowner insurance coverage is also something you should do at least every year or two. These days, home prices are appreciating rapidly in some markets, and sharp increases in the price of building materials have made it far more expensive to rebuild a home. This could mean that you need to update the amount of replacement cost coverage you have in your homeowner’s policy. If you have done any remodeling or home renovations, this is another reason to revisit your homeowner’s coverage. Finally, if you have any high-value items that you have recently purchased, you will want to consider adding extra endorsements to your policy to adequately cover these items.
Life Insurance: As life changes, your life insurance needs are going to change with it. For example, have you been recently married or divorced? If so, you will probably need to change the beneficiaries on your life insurance policy. How about your income and debt obligations? Has your income increased in recent years? Have you taken on more debt, such as a home mortgage? Your life insurance policy should provide enough coverage for your beneficiaries to maintain their current standard of living in the event of a worst-case scenario. This could mean adding some additional coverage in the New Year to help close any gaps in this area.
Extra Liability Insurance: Do you have significant assets? Beyond your home, do you have other investments, such as stocks, retirement accounts, or rental property? If so, these assets may be at risk if you are ever sued for being at fault for a personal injury. To protect yourself from this scenario, it is wise to consider an umbrella insurance policy. Umbrella policies provide extended liability insurance in increments of $1 million, and the average cost is just a few hundred dollars per year. This is a very affordable add-on policy for individuals who have assets they want to protect.
Work with a Local Independent Insurance Agent: As mentioned previously, there are numerous insurers out there, and all of them have their own unique areas of specialty within the marketplace. For this reason, it makes sense to obtain your insurance through an independent agent. Independent insurance agents work with several of the top carriers in your state, and because they are not captive to anyone particular insurer, they can shop for you freely without any pre-set agenda and help you obtain the policies and coverages you need from the carrier(s) that will provide you with the best value for your money.