10 Questions for Assessing Insurance Needs and Changes
March 4, 2016
When life circumstances change, insurance needs change with them. This is why agents across the country encourage Americans to review their insurance policies every year to update coverage for such changes. These are 10 important questions to consider when updating coverage.
Did marital status change? When a person gets married, it is important to add a spouse to home and auto policies. Merging two established households means adding more valuables, and these should also be properly insured. If there are a lot of new expensive valuables, they may need separate coverage. Married couples should also have adequate enough life insurance to compensate for the loss of a partner. When getting divorced, couples must update their home insurance policies to reflect who owns what and auto policies to reflect who drives each vehicle. Life insurance beneficiaries should be updated as well.
Was there a new addition to the family? If a married couple has a baby or adopts a child, it is important to update a life insurance policy to include the new child. This should be done even if the child is not named as a beneficiary. A higher coverage amount should be added to each partner's policy to provide funds for all surviving family members, and some people may want to add enough for each child to attend college in the future. Longterm disability insurance is also a must for any couple with children.
Are there any new drivers? When a teenager starts driving or a caregiver must be added to a policy as a covered driver, it is important to review and update auto coverage. Since teens are prone to accidents, the policy should allow ample coverage for them. Teens who earn good grades are eligible for student discounts as well.
Has income changed considerably? Many people choose to decrease their life insurance when they downgrade to a job with lower pay. However, it is more important to change coverage when income increases or a new employer does not offer life and long-term disability coverage. In the case of an income increase, a higher coverage amount will compensate for new financial commitments such as a home or vehicle that survivors would need to keep up. Adding individual long-term disability and life insurance will compensate for a loss of employer coverage.
Were any home renovations made? Several types of renovations increase the value of a home. It is important to update a home insurance policy to include these. Also, consider outside structures such as gazebos and garages. Talk to an insurer before adding any nongated pools, water slides and trampolines, which are considered hazards.
Was another home purchased? People who buy additional properties as vacation homes or part-year residences should buy ample coverage for them. Since many vacation homes are near lakes, oceans and rivers, they may also need separate flood protection. Homes that are vacant for long periods of time may cost more to insure, which is why it is best to speak with an agent before committing to buy a second home.
Were any new valuables added? An expensive wedding ring, a valuable antique firearm and a one-of-a-kind expensive painting are just a few examples of added valuables. It is important to declare these in detail to an insurance agent. They require a separate floater or endorsement policy.
Was a property lease signed recently? If a person signs a lease to rent an apartment or a home, the landlord is responsible for replacing or fixing the structure. However, renters are responsible for replacing any damaged or stolen items of their own in the property. It is important to have adequate renter's insurance to cover all belongings.
Is there a new carpool? Anyone who joins a carpool has an added risk when several passengers frequently ride in the car. Talk to an agent about providing for the added risk.
Has anyone retired recently? Retired individuals often drive less. Report any mileage estimate changes to an insurance agent for a possible discount, and retired drivers may qualify for an additional discount.
To learn more, discuss concerns with an agent.