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Review Your Insurance Policies

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 [3]!

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 [4]?

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!