Time for an Insurance Review
Insurance is one of those things you tend to get and forget—until you have to make a claim. And that's exactly the wrong time to find out your coverage is inadequate. In general, you should review your insurance coverage once a year, or whenever you have significant changes to your personal or financial situation.
“Taking time to do an insurance review with your agent could save you hundreds of dollars each year in premiums,” says Adam Steele, Private Client – Personal Insurance Sales Executive, Johnson Financial Group. “Even more important, it can help ensure you have the proper coverage so you aren't left high and dry in case of a claim. “Most insurers have a niche market,” Steele adds. “An independent agent has access to a range of companies and will take the time to understand your needs, explore all the options and help you choose what's best for your situation.”
Topics to Cover
You and your agent should discuss:
- Changes in your home's value. Over the past few years, home prices have increased an average of 5 percent annually.1 “As inflation and the minimum wage rise, the cost of rebuilding a home goes up,” Steele says. “Rather than focus on what you paid for your home, you need to consider the cost to rebuild.” In addition, any remodeling, renovations or added square footage may have increased your home's replacement value beyond what your current policy will cover.
- Your personal property. A home inventory is key, but according to the Insurance Information Institute, only about half of homeowners have completed an inventory of their possessions.2 “When you're the victim of a fire or theft, you aren't necessarily going to remember every item you own,” Steele says. “One of the easiest ways to create a home inventory is to take pictures or videos of each room in your home. Record serial numbers of electronic equipment. Then upload the information to the cloud so it's always accessible.”
- Your auto insurance. According to one study, the average driver hasn't changed auto insurance companies for 12 years.3 “You aren't necessarily going to get discounts simply due to loyalty,” Steele says. “Your agent can help you explore whether your coverage is adequate and whether you can get a better deal.”
Where are the gaps?
Your review is also a good time to discover coverage gaps that should be addressed. “For example, water damage is one of the top reasons for homeowners insurance claims, but not everyone is aware that flood damage is generally excluded under a standard homeowners policy,” Steele says. “Yet even homes in areas not usually subject to flooding can be at risk.”
Another consideration: Many high‐value items—such as cash, art, jewelry, antiques, collectibles, certain musical instruments and firearms—are either not covered or have a coverage ceiling. You may need to include policy riders to protect these items.
When it comes to auto insurance, medical payments coverage provides financial protection for you and the passengers in your vehicle in the event you are found at fault in an accident. “It's one of the most important protections you can have, and it's often overlooked or even left off an auto policy,” Steele says. Finally, consider umbrella insurance, which provides liability coverage over and above your homeowners and auto policies. “You may not realize that, even with few assets, if you're sued and found at fault your future wages could be garnished,” Steele says. “Umbrella liability coverage provides inexpensive peace of mind.”
Time well spent. We've all seen ads promoting pricing tools and online gimmicks suggesting that getting insurance is quick, easy and cheap. But there is no substitute for an in‐depth conversation with an independent agent who has your best interests in mind.
Talk with your Johnson Financial Group Personal Insurance Executive or contact us today.
1. CNBC.com, June 6, 2018.
2. Insurance Information Institute, www.iii.org.