Insurance is one of those things that many people don’t think about until they need it. It’s important to have, but the average person really wants a sort of “set it and forget it” policy. While that works some of the time, there are a few situations in life when you need to really take a step back and look at your overall insurance picture to make sure you have not only the right amount of insurance coverage, but also the right types of coverage.
These are five situations that should warrant an insurance policy review.
1) A Marriage
For many people, the first time it becomes necessary to take a long hard look at your insurance policy is when you get married. This is a time when you are combining two households and intertwining two lives.
You will need to explore your home insurance (or renters insurance if you are renting) as well as your life and auto insurance. You may find that you can cut costs substantially by bundling policies and still get the extra coverage you need to meet your growing insurance needs.
2) A Birth
The birth of a baby is another time to take stock of your current insurance situation to see if it is adequate to meet your new demands. Babies require a lot of equipment. You want to do everything in your power to make sure your baby is protected from the worries of the world.
This means providing the necessary home insurance, auto insurance, and life insurance. Those needs will evolve some over time – five minutes from now when baby is getting a learner’s permit, for instance, so make sure to develop a relationship with an agency you can trust to help you meet those needs over the years.
3) A Move
Whether you’re upsizing your home to meet the needs of a growing and expanding family, moving to another town for business, or downsizing your home as an empty nester, a new address means new insurance needs.
Many things factor into the calculation of your insurance premiums, such as the location of the home, environmental risks in the area, the age of the home, the last time the home was updated, local crime statistics, the size of the home, and more. Your home insurance doesn’t simply carry over from one home to the next. You’ll need a new homeowner’s insurance policy when you move for the specific home in question.
Also if you leave your existing home empty while waiting to sell, you will need a different type of insurance coverage for the empty property, so make sure you discuss your needs for the old and new property with your agent.
4) A Promotion
A new financial situation means new financial obligations. When you get a promotion at work it almost always comes along with a raise and other financial changes in your life. Once your family begins to rely on your new financial reality, you may see that your needs for life insurance will change. You will need more coverage in order to afford your family the ability to maintain their current lifestyle if you’re no longer able to provide for them. You will want to review your policy to determine if you need a supplemental policy or simply want to increase your existing coverage.
5) An Empty Nest
When your children move out of the home and begin lives of their own – when they no longer rely on you for financial support – is another good time to review your insurance situation. You may find that this is also a great time to consider downsizing your home and home insurance to something smaller, as well as your life insurance. Or you may feel that now is a time when you need to raise your coverage so that you can leave a legacy for your grandchildren. Either way, a long talk with your insurance agent can help you make a decision that works for you.
These five situations represent a handful of times in life when it’s a wise policy to review your coverage. Most agencies recommend a yearly insurance policy review to ensure that you have the coverage you need for the many curve balls life may throw your way.