Key takeaways

  1. Periodically reviewing insurance policies is key to ensuring financial security and peace of mind
  2. Evaluate coverage limits, deductibles, premiums, exclusions/limitations, and look for discounts/cost-saving measures
  3. Homeowners: confirm property value increase/decrease; review recently acquired expensive items; consider umbrella insurance
  4. Life insurance: review each policy individually; consider major life events like marriage, new baby, death in family or health changes
  5. Health insurance: check doctor networks & premiums; research Medicare if nearing age 65
  6. Auto insurance: consider car value, driving record & credit score; bundling auto & homeowners or changing primary drivers to occasional may help reduce premiums

Periodically reviewing your insurance coverage is an important part of staying financially secure. Life can change quickly and without warning, so it’s essential to make sure that you are adequately protected when unexpected events occur. 

Insurance policies provide peace of mind and financial security during life-changing events like accidents, deaths, or natural disasters. Adequate coverage can also protect you and your family against potential lawsuits or other legal claims. 

What does an insurance review entail?

An insurance review typically includes a review of all existing policies, assessing any changes in your life or circumstances, and analyzing the coverage limits, deductibles, and premiums associated with each policy. 

In addition, you should consider any exclusions or limitations in the policy and look into potential discounts or cost savings measures. 

What should I consider when reviewing my insurance? 

When reviewing your insurance coverage, there are several key considerations to remember. 

  • First and foremost, make sure that you have the right amount of coverage for your situation. This includes examining each policy’s deductibles, limits, and premiums. 
  • Consider any changes in your life or circumstances that could affect your insurance coverage needs, such as getting married, having children, moving to a new home, or starting a business. 
  • Make sure your coverage is up to date and aligns with current state laws. In some cases, increasing the level of coverage may be worthwhile if you’ve recently experienced a major life event. 
  • Review any exclusions or limitations in your policy. Be aware of any risks that may not be covered and look for ways to reduce those risks. 
  • Check to see if discounts are available for bundling policies or other cost-saving measures. 

Checklist for reviewing insurance 

Regularly reviewing your insurance coverage is crucial to protect your property, possessions, and loved ones. 

Here’s what to evaluate, broken down by type of insurance:

Homeowners policy (or renters) 

To review your policy, locate the declaration page. If it’s not in your documents, ask your insurance company. The declaration page summarizes your current coverage, allowing you to assess if adjustments are necessary. Common reasons for reviewing homeowner’s coverage include:

  • Property value increase: If your home has appreciated in value, adjust your coverage accordingly. Instead of relying on the appraised value, use the per-square-foot replacement cost in your area as a reference, available from your local Home Builders Association. This will help you accurately determine the coverage you need.
  • Renovations: Home remodeling can impact value, which should be considered in your policy. Some policies may not cover remodeled areas without documentation, even if the home value remains unchanged.
  • Recently-purchased expensive items: If you recently acquired high-ticket items (e.g., jewelry or high-end art), it is recommended to update your insurance coverage to ensure they are included. 
  • Gaps in current coverage: Consider umbrella insurance to supplement your home insurance policy. It provides additional protection for worst-case scenarios, like serious injuries resulting from negligence in your home.

Be sure to check for discounts. You may qualify for lower premiums if you’ve recently updated (or added) certain risk-mitigating features like a security or fire-protection system.

Life insurance coverage 

A routine life insurance policy review ensures you have the right type and amount of coverage to meet your family’s insurance needs. Life insurance comes in many forms (e.g., term insurance, universal life insurance, permanent life insurance, etc.). Each policy’s benefits can vary, so it’s vital to review each one individually.

Major life events for reviewing life insurance coverage include:

Be ready to provide information like medical records and beneficiaries’ Social Security numbers. And remember to review your beneficiary designations regularly. These individuals have priority over those named in a will or trust. 

Health insurance 

Your health isn’t the only factor that triggers a review. State and federal laws can also affect your coverage.

Here’s what to consider:

  • Is your doctor part of your plan’s network?
  • How much are your premiums, deductibles, and total out-of-pocket expenses?
  • When is your next open enrollment period?
  • Does your plan cover all of your prescriptions?
  • Does your plan allow Health Savings Account (HSA) contributions?
  • Are you turning 65 soon? (If so, start researching Medicare benefits.) 

Your choices regarding an HMO or PPO and your healthcare needs can influence the importance of certain answers to these questions. For example, you may be comfortable paying higher out-of-pocket expenses in exchange for access to your primary care physician.

Auto insurance

Auto insurance costs vary based on factors like car value and your driving record. Surprisingly, improving your credit score can lower premiums.

Here are additional factors that may contribute to reduced premiums:

  • Recently updated health coverage: You can potentially decrease medical coverage in your insurance policy.
  • Bundling auto and homeowners: Potentially save money. Insurers consider homeowners lower risk.
  • Your zip code: Your neighborhood and even where you store your car can impact insurance rates.
  • More drivers than cars: Does every driver in your home need to be listed as a primary driver on your policy? Consider changing one or more primary drivers to “occasional” to help save money.

Other types of insurance to review (or consider)

Ensuring coverage for your health, life, house, and car is crucial, but don’t forget to consider these other types of insurance.

How often should I review my insurance coverage?

You should review your insurance coverage at least once a year. By taking the time to review and update your policy periodically, you can ensure that you have the right amount of protection for any unexpected events in life. 

If you experience a major life event, such as getting married, having a child, or losing a partner, it’s important to review your insurance coverage right away.  

Final word

Annually reviewing your insurance policies will help you stay up-to-date on any changes in coverage that may be necessary. Taking proactive steps to review your policies can protect your family against unexpected events. 

Remember, finding the right balance between protecting yourself and your family without breaking the bank on costly premiums is critical. With a little extra effort and research, you can rest easy knowing your family is properly insured in every facet of life.