Review Your Insurance Policies

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With many aspects of your financial life, there’s a certain amount of “set it and forget it.” In some cases it works out well, such as setting a contribution to a retirement account or establishing a savings plan that auto-transfers money from your checking account to a savings account. In other cases, it’s important to take a look at those plans every year to make sure they still make sense for your situation.

Insurance policies fit into that category and it’s important to take stock and review your insurance policies each year. A lot can change in a year and unless you take some time to review your policies, you may be surprised when it comes time to use them.

This post is part of the 2011 Spring Cleaning Week!

Auto Insurance

Auto insurance is probably one of the most insurance policies you have since most people drive their cars every single day. With the passing of another year, it’s time to take another look to see if you want to make any adjustments to your current policy.

Do you still want all the coverages you have on your vehicles? Perhaps you want to increase the deductible or drop comprehensive coverage from an older car? Have you shopped around for insurance in the last few years to see if you’re truly paying the best price for your coverage? Now’s as good a time as any to check around.

Renters/Homeowners Insurance

We’ll get into reviewing and updating your home inventory this afternoon but for now you’ll want to make sure that the policies still make sense. Again, much like auto insurance, you’ll want to check your coverages (do you have all the necessary policy riders like jewelry, flood, and others?) as well as your deductibles. Perhaps you’ll want to raise that deductible and put the savings into your emergency fund as a way of self-insuring?

Life Insurance

If you don’t have life insurance, is this the year you want to get it? It certainly doesn’t hurt to call up an agent to see if a life insurance policy fits in your financial plan. In general, as far as I understand it anyway (I don’t currently have life insurance), life insurance is intended to protect your family in the event of your death. If you have large outstanding liabilities, like a mortgage, it’s important to protect your future cash flow (from working) with an insurance policy in the event your cash flow terminates.

These are just three of the many insurances you’ll want to take a closer look at and the Spring is just as good a time as any!

{ 7 comments, please add your thoughts now! }

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7 Responses to “Review Your Insurance Policies”

  1. Jason says:

    Great article as ususal. The only thing I disagree with is the dropping of comprehensive coverage. Having worked in the insurance industry for many years, the comprehensive coverage is generally not that much of a savings if dropped or removed. For example, if your vehicle is stolen, you hit a deer or anmial, or an act of nature (hail) damages or totals the vehicle, comprehensive would cover these types of claims. I knew of someone who dropped comprehensive and collision on their policy and their vehicle was stolen. Had they kept the coverage, they would have received something for the vehicle (less the deductible) rather than nothing. Also, if someone has an outsanding loan on the vehicle, they generally cannot drop comprehensive and collision because the leinholder (bank) ususally requires this coverage until the loan is paid in full. Otherwise the leinholder could force place coverage and the premiums are much higher.

    • Shirley says:

      You are so right on the comprehensive and collision!

      We have a ’98 Blazer that we dropped them on as it was a third car and seldom used. A grandson was driving it and was broadsided (no injuries) to the tune of $3,600. The other driver’s insurance claimed it to be 50/50 fault because they were unable to personally contact the witness, even though his statement was included in the police report.

      The result was that the accident cost us $1,800. Keeping the comprehensive and collision sure would have cost less in money, time, and aggravation! Lesson learned, albeit the hard way.

  2. Where is your ‘portfolio insurance’?

    Passive investors need insurance as much as active investors, yet almost no one recommends owning it.

    Options, Jim. Options. Collars provide insurance at the cost of limiting profits.

    Puts provide expensive insurance with no such limitations.

    Not for everyone, but certainly worth mentioning.


  3. eric says:

    I remember there was a website to get various auto quotes from…..I bookmarked it and can’t find it now. Anyhow, I’m shopping around for auto since my renewal is coming up soon.

  4. zapeta says:

    Another insurance you might want to consider is umbrella insurance if you have a high net worth. For example, a lot of auto policies will pay a maximum of 300k to someone that you injure in an accident. If the settlement is larger than the amount the auto policy will pay, umbrella insurance will cover the additional up to the maximum amount of the umbrella policy. My understanding is that if you don’t have the umbrella policy, you would have to tap your assets to pay those costs.

  5. skylog says:

    i have been wanting to look into renters insurance for some time, but i keep putting it off. thanks yet again for pushing an idea to the front of my mind.

    it should have been done long ago.

  6. Shirley says:

    A Sacramento tow truck company is questioning recent charges to a couple whose car was stolen in Stanislaus County and says he doesn’t know why a car owner was charged more than $3,000 for their stolen car to be towed out of the Delta-Mendota Canal.

    The tow truck driver pulling stolen cars out of the canal said his equipment is expensive to operate and he has offered the car owner a reduced deal of $1,500 if he signs over his car.

    Insurance company representatives said customers may have to pay if they only have liability instead of a more comprehensive plan.

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