As the calendar flips to a new year, many of us take stock of our lives, set goals, and focus on making improvements. While health, fitness, and financial resolutions are common, one area often overlooked is insurance. Whether it's car, home, health, or life insurance, the new year is an excellent time to review your policies, ensure they align with your needs, and potentially save money. Here’s a comprehensive guide to checking and updating your insurance coverage as you move into the year ahead.
Why Review Your Insurance at the Start of the Year?
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Life Changes: Major events like moving, marriage, divorce, the birth of a child, or retirement can impact your insurance needs.
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Policy Expirations: Many insurance policies renew annually. Reviewing them before they auto-renew can help you avoid overpaying or missing better deals.
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Cost Savings: Rates can change year to year, and insurers may offer new discounts or incentives.
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Coverage Adjustments: Over time, your assets and risks change. Ensuring you’re adequately covered can save headaches and financial losses later.
Step 1: Gather Your Insurance Policies
Start by compiling all your existing insurance policies, including:
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Auto insurance
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Homeowners or renters insurance
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Health insurance
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Life insurance
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Disability insurance
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Any specialty policies (e.g., pet insurance, travel insurance)
Review the details of each policy, such as coverage limits, deductibles, premiums, and expiration dates. Having a clear understanding of what you currently have will make it easier to identify gaps or areas for improvement.
Step 2: Assess Your Current Coverage
Take a close look at your policies and ask yourself:
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Are your coverage limits adequate? For example, has your home increased in value, or have you acquired new valuables that need protection?
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Are you over insured? If you’ve sold a car, downsized your home, or paid off debts, you might not need as much coverage.
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Are there gaps in your coverage? Consider situations you’re currently unprotected against, such as flood damage if you live in a high-risk area.
Step 3: Compare Quotes from Multiple Providers
Shopping around is one of the most effective ways to save on insurance. Use an Independent Agency like ours that can gather quotes from at least three to five providers. When comparing quotes:
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Ensure you’re comparing apples to apples by matching coverage levels and deductibles.
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Look beyond the price. Consider the insurer’s reputation, customer service ratings, and claims process.
Step 4: Take Advantage of Bundling Opportunities
Most insurance companies offer discounts when you bundle multiple policies, such as auto and homeowners insurance. Bundling not only saves money but also simplifies your insurance management by consolidating policies under one provider. Be sure to:
Step 5: Explore Available Discounts
Insurance companies often offer discounts based on various factors. Some common discounts include:
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Safe driving or accident-free records
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Installing safety features in your home (e.g., smoke detectors, alarm systems)
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Paying premiums annually instead of monthly
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Loyalty discounts for staying with the same insurer
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Good student discounts for young drivers
When reviewing your policies, ask your insurer about any discounts you might qualify for and ensure they’re applied to your account.
Step 6: Review Deductibles and Premiums
Adjusting your deductible—the amount you pay out of pocket before insurance kicks in—can impact your premiums. A higher deductible generally means lower premiums, which could be a smart choice if you’re financially prepared to handle minor claims. On the other hand, if you’d prefer lower out-of-pocket costs in the event of a claim, you might opt for a lower deductible and higher premiums.
Step 7: Evaluate Life Insurance Needs
Life insurance is essential for protecting your family’s financial future, but your needs may change over time. Consider:
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Increasing your coverage if you’ve recently had children, purchased a home, or taken on new financial responsibilities.
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Adjusting or even reducing coverage if your children are grown or you’ve paid off significant debts.
Don’t forget to review your beneficiaries and ensure they’re up to date.
Step 8: Check Your Health Insurance Options
Health insurance often renews at the start of the year, making this a critical time to review your plan. Key considerations include:
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Are your current doctors and preferred providers in-network?
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Does your plan cover anticipated medical needs, such as prescriptions, surgeries, or therapies?
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Would a different plan save you money while meeting your needs?
If you’re considering switching plans, compare options during your employer’s open enrollment period or through the Health Insurance Marketplace.
Step 9: Don’t Forget Specialty Insurance
Specialty policies often fall through the cracks but can be just as important. Review coverage for:
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Pet insurance: Ensure your plan covers your pet’s breed-specific conditions.
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Travel insurance: Consider a policy if you’re planning significant trips in the coming year.
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Umbrella insurance: This provides additional liability coverage beyond your auto or home policy limits and is particularly useful if you have significant assets.
Step 10: Document Your Updates
Once you’ve made changes to your policies, take the time to:
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Store updated copies of your insurance documents in a safe, accessible location.
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Inform family members or other relevant parties about changes, especially for policies like life insurance.
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Set reminders for upcoming renewal dates to revisit your coverage next year.
Bonus Tips for Maximizing Savings and Coverage
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Use an Independent Insurance Agent: Independent agents work with multiple insurance companies and can help you find the best coverage and rates.
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Improve Your Credit Score: Many insurers use credit scores to determine premiums. Improving your score could lead to lower rates.
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Consider Telematics: Some auto insurers offer discounts for safe driving through telematics programs that monitor your driving habits.
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Revisit Policies Mid-Year: While the new year is a great time to review your insurance, don’t hesitate to reassess mid-year if significant life changes occur.
Final Thoughts
Checking on your insurance as you enter the new year isn’t just about saving money—it’s about peace of mind. Knowing you’re adequately covered can help you face the year ahead with confidence. By reviewing your policies, comparing quotes, bundling for savings, and adjusting coverage to suit your needs, you can optimize your insurance and start the year off right. First State Insurance Agency Southwest has all the options to give you the right coverage for all of your insurance needs. Call or text us today @ 507-376-3950