There’s no set period for how often you should review your policies but there are some guidelines that can help. For instance, if a major life change occurs like a marriage, birth or move, it’s a good idea to examine your polices. If you haven’t had any life changes it’s a good to examine your polices every year or so. Taking the time to review your policies does not necessarily mean you are planning to shop around for new coverage, especially if you’re happy with your current carrier. It does mean doing your own due diligence, meeting or speaking with your insurance agent, and talking about what might have changed over the past year, to make sure you continue to be properly protected.
So When Should I Review My Policies?
Most insurance companies will mail your automobile and homeowners renewal policy information to you at least 30 to 45 days before the expiration date. You’ll always receive a new declaration page along with copies of the actual policy forms explaining what each coverage means. This is an excellent time to review your policy, with your insurance professional, because if there is a concern you’ll have time to either remedy it or find a new company to work with.
If you have an auto insurance policy that renews every 6 months, you should review it for accuracy every time it renews, but consider doing a more thorough examination every year.
What Should I Look For?
Hopefully you’re keeping your policies from year to year. Your first step is to take out the declaration pages, which are the main outlines, and compare information. Make sure your name, address, and identifying information details are all correct.
In the case of your auto insurance, you’ll want to make sure your coverage limits are the same (unless you’ve changed them during the year) and that they are adequate. Compare the prices and note if they’re higher or lower. If the coverage options are the same but the premium is higher, make a note to call your agent and find out why. It could be because of a violation or accident but it could also be because your insurance company changed its rates. Perhaps you lost a discount for not providing documentation, like a good student discount for a college student because a new grade report wasn’t received. It’s a good idea to make sure that all your vehicle and driver information is correct as well.
In the case of your homeowners insurance policy, you’ll want to start by making sure the address is correct, for both mailing and location. You’ll need to carefully compare your policy limits, keeping in mind that most insurance companies have an automatic inflation guard built into their policies to increase your limits based on changes in the economy. Since all of the coverage parts pertaining to your property are based on a percentage of the replacement cost of your home, it is not unusual to see all of these numbers increase annually. Keep an eye on them, though. An automatic inflation guard on a home in an area that’s relatively stagnant may not be needed. You may need to ask your agent to run a new replacement cost estimator to determine the actual cost you need to be insured for. The insurance company can then decrease or increase your coverage limits as needed if there is justification/documentation.
If you do see a premium increase and can’t find a justifiable reason for it, call your insurance professional. You can either work with your current company to bring your rates down, if possible, or start shopping for a more affordable option. Your agent will be able to help you determine which route is best for you.