Many American households have insurance on at least two things: their vehicles and their living space. Other than making sure that we pay our premiums, we don’t tend to think too much about our policies. This could be a costly mistake—one that could be avoided by reviewing our policies.
Reviewing your insurance policies might sound like a hassle—or at very least, yet another chore to add to an ever-growing list of things to do. But it’s an important part of making sure you’re properly covered and getting the right insurance for your needs.
What is an insurance policy review?
An insurance policy review is a detailed examination of the coverage you carry, and an assessment of what, if anything, has changed since you purchased the policy or since your last review. A policy review can be specific to one type of policy, or it may look holistically at all of your coverage.
If your policies are bundled, a policy review will probably look at everything a single carrier provides. In addition to this being efficient, it’s because your answers will filter through to the different components of your coverage.
When something big changes—for example, your marital status—if you’ve bundled your policies through one insurance company, your changed status will update through all of the policies you have with that carrier. Separate insurers likely mean multiple calls to update this information.
A policy review can be a good idea even if not much has changed for you personally. That’s because external factors contribute to your coverage too. Construction costs have gone up a lot, so your homeowners insurance policy limits might not be enough to rebuild your home. Vehicle repair costs and the availability of replacement parts can impact your car insurance coverage.
An insurance policy review will examine all of these varying facets of coverage. The objective is to determine what has changed that might lead to gaps in your insurance, and figure out what is needed to make sure coverage meets your current needs.
What types of insurance should a policy review cover?
All of the types of insurance you would typically secure to cover your property, such as homeowners or renters insurance, your vehicles, and any valuable personal property riders should be reviewed.
Life insurance policies should be periodically reviewed as well, especially after any major life changes. For example, if you purchased a life insurance policy when your children were born that factored in college costs, once they have graduated from college you should review your life insurance coverage.
For most of your insurance policies, a review is a good idea—especially if it has been a while since you secured your policy.
Don’t avoid conducting a policy review just because you think it might increase your rates. Changing factors can also sometimes reduce your premiums. For example, many more people now work from home periodically. If your commute has reduced the number of miles you drive each year, you could qualify for a lower car insurance rate.
For homeowners, the purchase of a Ring camera or other home security system, or a change in pet ownership after a dog passes away are two examples of changes that, when reported to your insurer, may reduce your premiums.
When should you review insurance policies?
A conservative, safe answer to the question of how often you should review insurance policies is annually. Getting into a regular routine of assessing your coverage and what might have changed is a good way to ensure your policies are up-to-date and able to protect you. A lot can change in just one year!
Try tying your review to a date or event that is logical and memorable—like the day you moved into your home, or a birthday or your anniversary. Having your annual review associated with a date you typically celebrate will help you remember.
If an annual checkup feels overly burdensome, consider reviewing coverage every other year. You might be surprised at how frequently changes that can impact your coverage can happen.
You should also review your policies any time you make changes or modifications that change the cost of replacement. Home improvements, especially big-ticket changes like kitchen or bathroom remodels, or alterations that change the square footage of your home like an addition, are absolutely situations in which you’ll want to review your homeowners policy.
Why are insurance policy reviews so important?
Periodically reviewing your insurance policies is important because so many things can change over time, directly impacting your insurance coverage. Changes can result in policyholders discovering that they are underinsured at the worst possible time—when they go to file a claim only to learn that their coverage isn’t enough to repair or rebuild their homes.
Multiple factors in the broader economy have changed, increasing the number of homeowners whose property coverage limits are likely now insufficient. The severity of this problem varies by state and by region, with areas that have experienced steep increases in labor costs and building materials impacted the most.
Reviewing your insurance policies will help to reveal some of the areas where your current coverage might not be enough.
Policy reviews are important
Finding out you don’t have enough coverage to rebuild your home after a fire or other covered peril can be devastating. Conducting a policy review is important, but that doesn’t mean it has to be inconvenient.
If you need a hand in assessing you insurance policies to make sure you have the right coverage, contact the experts at Rate Insurance. With access to more than a hundred top insurers for home, auto, life, and pet insurance, they can help you to find the right coverage at the best rate.
Disclaimer:
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate Insurance. Rate Insurance, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
