According to the Insurance Information Institute (III), you should review your insurance needs at least once every year to identify and fill any gaps in your insurance policies and adjust your coverage amounts to avoid over insurance. For example, if your home value has depreciated, you may need to lower your homeowners insurance coverage to reflect the cost of rebuilding rather than market value. In addition to a yearly review, you should do an insurance review any time you make significant purchases, mitigate risks, or make substantial changes to your home or business.
The following checklist offers guidance for an annual insurance review.
Check the Amount of Coverage
According to the National Association of Insurance Commissioners (NAIC), the average cost of homeowners insurance coverage in the U.S. is about $1,200. The actual amount varies depending on factors such as home value, risk, and amount of coverage. When reviewing your coverage needs, you should consider the amount of insurance you require to avoid over or underinsurance. Things like buying another car or installing a trampoline might mean you need to increase your coverage while selling off property could mean a chance to decrease coverage.
Take Advantage of Available Insurance Discounts
Most insurance companies offer discounts if you bundle your policies, reduce risk, or go claim-free for a specific period. For example, you can earn a discount on your auto insurance policy if you have an anti-theft system in place, airbags, a new car, or a clean motor vehicle record (MVR), says the Government Employees Insurance Company (GEICO). When doing your annual insurance review, you should find out what insurance discounts you are eligible for and take advantage of them to lower your premiums and avoid over insurance.
Ask for Lower Premiums for Mitigating Risks
In general, insurance companies determine the cost of insurance based on the insurance risk involved, with high risks attracting high premiums and vice versa. In California, home insurance costs have spiked in recent years due to the prevalent wildfires in areas such as Malibu, as reported by the California Department of Forestry and Fire Protection. While some risk is unavoidable, there are certain things like adding security or better lighting to a property that can help to mitigate risks. During your annual insurance review, be sure to outline all the improvements you’ve made on your property to significantly reduce covered perils and ask your insurance provider to lower your premiums as a result.
Check for Any New Exclusions
Insurance policies typically have exclusions. For instance, the standard home insurance policy does not cover damage resulting from floods, wear and tear, and earthquakes. Similarly, while some insurance providers may cover aggressive dog breeds at higher premiums, others may require you to separately purchase a dog liability insurance policy. Be sure to check for exclusions in your policy, such as precious metals, jewelry, and artwork, especially if you’ve recently purchased any expensive items. When doing an annual insurance review, you should pay particular attention to any new exclusions. If you find new exclusions in your policies, purchasing the necessary stand-alone policies to cover these exclusions will ensure you do not incur huge financial losses in the event of a disaster.
Taking the time for an annual insurance review can help ensure you have the right amount of insurance coverage and get the most out of your insurance policies. For a personalized review of all of your personal and commercial insurance needs, contact the team at Jack Stone Insurance Agency. Serving Antioch and neighboring cities in California, we are ready to find the right coverage for you today.