Policyholders who treat buying insurance as a “one and done” purchase risk assuming that last year’s policy still provides the right protection at the right price today. The good news is that you can ensure you are properly protected without overpaying with a simple annual insurance policy review. Here are the many ways an annual insurance review matters—along with practical steps for conducting an effective review that could lead to meaningful savings on your premiums.
The benefits of reviewing your insurance annually
An annual insurance review helps ensure your coverage reflects life’s changes, protects what you’ve worked hard for, and reveals opportunities to save money—before gaps or overpayments become costly mistakes.
Account for major life updates
Life changes constantly—and your insurance should reflect those changes. Be sure to let your agent know about any of the following, as they can affect your coverage:
- New vehicle or home
- Home renovations
- Married or divorced
- Having a baby
- Retirement
- Career changes or starting a home-based business
Uncover gaps in your coverage
The value of your property and possessions can change over time, which may leave you underinsured. For example, if your home’s current value is $400,000 but you originally insured it for $250,000, your homeowner’s insurance may no longer provide adequate protection. New purchases, such as high-end electronics or appliances, can also create coverage gaps. An annual review helps identify and fix these gaps so that you’re fully protected.
Discover discounts
Many insurance discounts are tied to life changes, and you may qualify for new discounts that weren’t available last year. For example, if your child moves away to college without a car, you may qualify for a discount on your auto insurance. Installing new safety features around your home could also lower your home insurance premium.
Stay compliant
Keeping your insurance up to date helps ensure your policies remain valid when you need them most. For instance, if you start a home business but don’t notify your insurer, your home insurance could be considered noncompliant, and claims might be denied. Regular reviews help you avoid these financial headaches.
How to prepare for an annual insurance review
Most insurers allow you to make changes to your policy at any time. But when you make a habit of conducting an annual insurance review, you’re less likely to put it off.
Often, all it takes is a quick call or email to your insurance agent. Before you do, gather and organize the following:
- Your insurance policies: Collect documents for each of your policies, which could include homeowner’s or renter’s insurance, auto insurance, life insurance, and health insurance. You can also include other relevant policies, such as umbrella liability or disability insurance, for example.
- A record of life changes: Make note of any major life changes or purchases over the past year, such as moving, marriage or divorce, new dependents, career changes, or significant purchases such as a home or vehicle.
- Shop around ahead of time: While staying with the same insurer can be convenient and sometimes rewarding, customers who are willing to compare options often get the best insurance rates.
What to ask during your annual insurance review
Once you’ve gathered your documents and are ready to review your policies with your agent, come prepared with these questions:
- Do I have enough coverage to rebuild my home if something happens?
Insurance companies typically replace your home with materials of “like kind and quality.” Even small upgrades can change your home from “standard” to “custom,” so check with your agent to ensure your coverage is still appropriate. - Do my coverage limits still apply?
If the value of your assets has increased over the past year, your coverage limits may need to increase, too. - Do I qualify for discounts?
Share any life changes or circumstances that may qualify you for new discounts.
Tip: Discover the five things your insurance agent wishes you knew to make the most of your review and ask smart questions.
Setting aside time for an annual insurance review can protect you from a major financial headache down the line. It can even save you money in the short term. Just a little planning and one or two focused hours is all it takes.