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There are many things that we do year-to-year. We get a checkup at the dentist, we register for our carnival costumes and we even pay our insurance premiums, but why is it that we don’t think to review our insurance policy every year? You might ask ‘why’, because what could possibly change in one year’s time that’ll affect your insurance substantially, but it might surprise you that quite a bit can.
Reviewing your policies on an annual basis should be a regular practice because you never want to be overpaying or underinsured. Just like an annual doctor’s checkup, making an appointment with your financial advisor should be a yearly recurring date – so grab your calendar! Each type of insurance should typically be revisited annually, so let’s break it down for you.
Most people tend to think that investing in life insurance is a ‘set it and forget it’ type deal, but there are many changes that happen year-to-year that can affect your life insurance policy! In fact, small changes can make a massive difference when it comes to your life insurance plan – like if your income has changed or your health has bettered (or sadly, worsened). Even decisions like buying a new home or paying off your existing mortgage should encourage you to revisit and adjust your policy, to make sure you and your family are always financially secure – no matter what happens.
On the other hand, if you’ve had a new child or are preparing for one, it’s important to ensure that you’re adequately insured to cover your family’s needs. Life insurance reviews tend to focus on the question “If I die tomorrow, who will provide for my family without my monthly paycheck?” Reviewing your policy annually is the best way to know that, should the unthinkable happen, your family is in good hands.
Your health is the one factor you probably shouldn’t play with. Between day-to-day doctor’s appointments and out-of-the-blue medical emergencies, having health insurance surely pays off in the long run. But if you’re covered, what could you possibly need to review your policy for? Turns out, a lot!
Plain and simple: it pays to be healthy, especially when it comes to your health insurance – and any changes to your health status require you to revisit your policy. This is especially important if you and your partner are expecting a child, as you want to make sure your policy covers all of the medical bills that are associated with childbirth and the early years.
A great reason to do an annual review is if you feel that you’re not happy with your current insurer – which is especially important when it comes to your health. If you found that going through the claim process was tedious or your insurer wasn’t as reliable as you’d have hoped, you might want to re-evaluate your insurer. You always want the claims process to be as seamless as possible, and having to jump through hoops just for a simple doctor’s visit isn’t worth it.
Owning a home is a major investment, so protecting that investment with the right insurance is definitely the smart thing to do – and that includes regularly reviewing your policies. With homes and the rapid market swing, it’s easy to find yourself under-insured, and that’s definitely not a state you’d want to be in when an emergency occurs.
If you’ve made some changes to your home, by renovating and expanding, or even by installing speciality safety features, you’ll definitely want to revisit your insurance policy to both ensure the renovated areas are covered and maintain the best possible prices. Many insurers reward homeowners for putting in place safety upgrades to protect your home and its contents, and these small installations can save you big money!
As the market changes, you need to review your policy to suit. The real estate market can change rapidly, and a home you purchased in 2010 is valued differently than what your home might be worth in 2019. Let’s say, hypothetically, that your home was valued at $500,000 in 2010. Now, almost a decade later, your home may cost close to $800,000 to rebuild, and the $300,000 gap in coverage in your insurance policy can be the difference between rebuilding a home or not should an emergency or loss occur.
Most people tend to review their car insurance year-to-year, switching insurers to find better rates or comparing the best quotes online, but there are more reasons than just a better price that should encourage you to review your policy every year. Considering some of the disasters Trinidad has experienced in the last year due to unexpected flooding and earthquake damage, it’s also important to revisit your policy regularly to ensure you’re covered in the event of these kinds of disasters. Just because your coverage may be comprehensive, it doesn’t necessarily mean that your insurer includes coverage for these “special perils”. Regular policy review means you’re never blindsided, especially after an unexpected event like that.
You also might want to review your car insurance annually if you’ve made simple changes like adding more drivers or driving considerably less than normal, as these can change your policy significantly. It’s important to notify your insurer if any of these changes occur to ensure you’re getting the best rates possible and that you remain covered in the event of an emergency – no matter who’s driving.
On the other hand, you should especially revisit your motor policy year-to-year as your car’s value depreciates annually. When you first bought your $200,000 car five years ago, you obviously insured it for as close to the purchased sum as possible – but let’s be real, over the years, its value has depreciated. Updating your car’s value year-after-year will ensure you’re not overpaying for insurance. If you find that your insurance policy is higher than the actual worth of your car, it might be worth it to consider switching coverage – and choosing a third party or third party theft and fire policy might work best for your budget. Just remember that in the event of an accident, your car won’t be covered, only the other person’s will!