There is a life cycle for insurance coverages, and each year, it’s important to go over your insurance policies to make sure you’re not over or under-insured and you’re not paying too much for your policies.Tax season is a great time to do an annual insurance checkup, and since private health insurance and business insurance are tax deductible, you may want to start trimming the fat from your insurance premiums.
Ideally, you’re comparing insurance rates every six months, but at minimum you should be looking at what other rates are available to you once a year. Insurance rates change every day and often dramatically over the course of a year. You may be surprised to learn that you’re paying hundreds of dollars more than you need to pay each year.
Here are the different types of insurance you should be reviewing and shopping annually and how to stay organized with renewals if you have several policies active at once.
The Insurance Lifecyle: Key Takeaways
- Shop for better rates and accurate limits every six months.
- Inflationary costs on repairs and labor render state car insurance minimums inadequate and most homeowners insurance limits insufficient.
- Private health insurance and commercial insurance for a business are tax deductible.
- You may be able to buy health insurance outside the open enrollment period.
- If your life insurance term is ending, consider all your options.
Car Insurance Annual Checkup
Before you think about price, consider how much car insurance you have. If you’ve ever had a bad accident, you may be aware that state minimum liability coverage is usually not enough to cover an entire accident. The remaining balance and the deductible you’re responsible to pay (if you carry collision coverage and need to use it) often range in the thousands. Here are some great tips:
To mitigate exorbitant costs, increase your liability limits. You may want to decrease the deductible amount too, but these changes will increase your monthly premium. As counter-intuitive as it may feel to increase your car insurance costs, you’ll actually be saving a great deal if you do have an accident that is determined to be your fault. With prices on parts and labor increasing, you’d be wise to make the change.
As for your own car, if you don’t already know, not a cent of liability coverage will be awarded to you to fix your car, not even if it’s the other driver’s fault. Their liability coverage would pay for damages, but what if they don’t carry enough to cover costs? Well, it would fall on you and you’d perhaps have to file an expensive lawsuit against that driver. The cheapest way to mitigate paying for damages to your own car is to have uninsured/underinsured motorist coverage, which is not very expensive. You can also carry collision coverage, which would pay for the remaining balance, but you’ll be responsible for the deductible amount, which will be deducted from the check the insurance company will send you.
If you’re adding coverage or increasing limits, you can compare car insurance rates to see which insurer will give you the cheapest rate. If you work with a reputable source, you will be comparing rates from reputable insurance companies. You may even end up paying less than what you were paying before you piled on the additional coverage that you need.
Given the complexity and potential financial repercussions associated with car accidents, it is wise to secure legal assistance following an incident. Accident.com has an experienced legal team ready to guide you through the intricate legal landscape, helping ensure your rights are upheld and you receive any appropriate compensation. They can assist with insurance claims filing, negotiate with insurers directly, represent in court if needed – an accident attorney is invaluable during these situations! After an accident happens it’s not just about fixing up your car but also taking care of medical costs, lost wages or any other unforeseen costs that must be covered – an experienced accident attorney is essential when addressing these expenses and costs that follow after.
Home Insurance Yearly Checkup
How long ago did you last create an inventory of all your possessions? We bet you’ve bought new furniture or threw away what was no longer valuable to you. And what about renovations or additions? Have you purchased a new roof in the past few years? All of these considerations will change how much insurance you need.
Create a new inventory using your phone. Do a walkthrough and itemize each belonging. Next, using the video create a price list. If you have receipts, it is helpful, especially for rare items for which you cannot pricing online.
Go over your existing coverages for contents (your belongings, including everything from furniture and clothes to new floors and art). You may need a rider for valuables like expensive art and jewelry, which is usually not covered for more than a thousand dollars, maybe two.
Go over your existing coverages for dwelling (your home’s structure, the floors, roof, etc..). Do you have high enough limits to cover your home as it is today?
Just as with a vehicle, the cost of repairing a home has also risen dramatically. Make sure you’re sufficiently insured. You may be spending more money this time around, unless you compare home insurance rates and see if another insurer will save you a couple of hundred dollars a year with all the coverage and limits you should have.
Health Insurance Annual Checkup
If you’re not on a company sponsored plan and are purchasing your own health insurance, it is tax deductible. Health insurance open enrollment ended at the beginning of the year. However, now is a good time to go over the out-of-pocket expenses you have to see if a higher tier of coverage may actually save you money in the long run. You may even be able to switch to another plan if you have a special qualifying event, like getting married or changing jobs.
Add up copays, deductibles and out-of-pocket prescription costs to see if you’d benefit from
increasing your existing coverage Before you increase coverage with your existing plan, it will be a good idea to compare health insurance rates. You may end up paying less with a comparable plan from a different insurer instead of paying more monthly.
Life Insurance Yearly Checkup
Is your term life insurance nearing the end of its term? Do you need to renew for another term or will it automatically renew? Is it the convertible type that you can renew as a permanent policy, possibly one with a savings component? Maybe you want a new type of policy.
If you have a permanent policy, consider cashing out its savings if rising prices are hitting you hard and you need help (or owe taxes). You can always take out a portion and leave behind enough so that the policy is paying for itself in monthly premiums. If you don’t have enough in your account and you don’t pay a monthly premium, your policy will become inactive.
Now, another important question: Do you have an existing permanent policy and misunderstand it, thinking you can leave behind the cash component to beneficiaries? No, your beneficiary or beneficiaries will only get the death benefit. Keeping that in mind, maybe it’s time to shop for a new policy.
Whatever you do, make sure you don’t abandon a policy that is worth money by not paying premiums! You won’t get what your policy saved up over time.
Commercial Insurance
The insurance lifecycle also applies to commercial insurance. You can deduct the commercial insurance for your business on your taxes so make sure to look over your policy to make the right deduction for last year. While you’re at it, go over your policy and see if you need to update the coverages based on new equipment you bought, new employees you hired, the building property’s upgrades and renovations (if you own it). Create an inventory of all your business property, from fax machines to supplies of paper. Take photos of upgrades and everything you’d want to be reimbursed for, in case of a severe storm or burglary. See if your coverage limits need tweaking to take everything into consideration.
Also, it may be time to buy more coverage if your business has grown. Do you have new risks that should be covered, like cyber insurance, in case there is a data breach in your network? Or would it make sense for you to consolidate all your coverages with a business owners policy (BOP), which may save you some money.
If you’re increasing coverages and limits, prevent your insurance premiums from increasing by shopping around for a new policy with your new inventory and coverages in mind. You may not have to spend more money to get the extra coverage. In fact, you may pay less if you compare rates from various insurers.
Tips on Staying Organized With Multiple Insurance Policies
- Track Your Open Policies – Companies like OneInsure, Policybazaar, Turtlemint, Paisa Bazaar and RenewBuy offer apps that can help you juggle all your insurance policies in one place. If you don’t want to buy an app, use a Google spreadsheet and add all payment dates to your Google calendar.
- Set reminders in your calendar to shop all of your insurance needs every six months to keep your premiums as low as possible.
Now that you see why it’s important to review your insurance policies twice a year (once at the very least), hopefully you’ll also end up paying less overall, whether it’s because you left no gaps in your coverage and something goes wrong or just because you compared insurance companies for your policies and nabbed the best deal.
More Insurance Resources
For Individuals looking for health care insurance, a good first stopping place is Healthcare.gov, the Federal Governments health insurance marketplace.
Consumer Reports has a good series of articles on insurance, especially car insurance.
And if you need a quote on insurance, The Zebra has an excellent insurance quote engine.
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