While you may consider your insurance policy something you “set and forget,” a Fresh Look™ once a year is incredibly valuable. An annual appointment gives your agent a chance to identify savings opportunities, gaps in your coverage, and other ways to ensure your risk management program fits your life. In case a disaster does occur, you’ll be glad you went through the review process to protect yourself. Take a look at some of the common aspects of an annual insurance review.
Life Changes
An annual review is a great time to discuss life changes with your broker. Events that may seem insignificant can impact your insurance policy and even save you money. For example, you may have improved your credit score or be able to pay your premiums annually instead of monthly.
If your marital status or living situation has changed, you’ll want to update your agent and make sure your insurance policy still fits your life situation. Even getting older can represent a life change at certain times of your life.
Other life changes might include having children, children moving out of the home, paying off a significant debt such as a student loan, and so on. Your agent can identify unnecessary coverage you can drop or a gap in coverage you’ll want to resolve.
Rate Changes
Seemingly small changes to your property can impact your insurance rates. If you have installed a security system, new smoke or gas alarms, or replaced your roof you may qualify for a lower rate. Many improvements that create a safer environment can earn you some savings on your insurance.
Other changes might require additional coverage or other considerations. For example, if you install a new swimming pool you’ll want to let your agent know right away. For auto insurance, when your children start driving they’ll need to be added to your policy as a new driver. While paying more for insurance isn’t fun, it is important to make sure you are properly protected.
Your annual review will give your agent a chance to make sure you’re paying an appropriate rate for your insurance.
Emerging Risks
As your lifestyle or business changes, some new risks can emerge. A Fresh Look™ at your policy will make sure all of your assets and liabilities are covered appropriately. Your agent can discuss changes that impact your insurance such as ownership changes, working from home, or business growth.
Businesses should consider changes in revenue, the number of employees, the scope of work performed, supplies, equipment, and inventory. For example, if your business has purchased or replaced equipment, you’ll want to make sure your coverage reflects its value as well as its cost to maintain. New equipment can be less costly to insure despite its higher monetary value because it is unlikely to be replaced shortly.
Gaps in Coverage
A gap in coverage happens when you don’t have the right type of coverage or the value of your property exceeds the insurance limits. In the event of a disaster, your insurance would not be sufficient to fully rebuild or replace your property.
Gaps in coverage might exist because the price of goods regularly fluctuates. Homes are an excellent example of a property that regularly increases in value. The home you purchased for $150,000 may cost $250,000 to rebuild 10 years later. That gap in coverage could leave you without the ability to rebuild if a loss occurs.
A coverage gap can also occur because you have upgraded or improved your property. These changes can be small like furniture purchases or large like renovations. During your review, you should mention anything you have changed in the past year to make sure you are fully protected.