Life Changes — Your Personal Insurance Policies Should Too

Posted in: Personal Insurance

How long has it been since you reviewed your personal insurance policies?

How long have you been with the same insurance company for all your personal risk management needs including auto, homeowner’s, and umbrella policies?

If your life has changed recently because you have moved, gotten married, bought new art, or renovated your home since you first purchased personal insurance, you might be underinsured.  This means you likely don’t have the coverage you need for full financial reimbursement in the case of a loss.

We meet families all the time who have purchased personal insurance directly from an insurance company, but they did not get any guidance regarding whether that policy was the most appropriate coverage for them. We also see people who chose their insurance company or agent because that’s who their parents used. That can be a great way to get started when you’re fresh out of college or a newlywed, but it often doesn’t end up being the best option 10 or 20 years later. In fact, clients who have never gone back and reviewed their coverages can end up either underinsured or uninsured because they have had numerous life changes since the policies were first purchased.

So, here’s an important question to ask yourself:

What major life events have happened since you last reviewed your personal insurance?

These life events can impact the premium and coverage of your existing policies. This is why you should have an insurance review to make sure there are no new gaps in your coverage, or you are not overpaying:

  • Moving from an apartment to a townhouse, then to a single-family home
  • Graduating from college, graduate, or professional school
  • Changing jobs
  • Going from being single, to a newlywed and to being a parent with kids in school
  • Your kids getting their driver’s licenses
  • Your kids moving out
  • Renovating your home
  • Starting an in-home business
  • Losing a family member
  • Accumulating wealth

Change is constant — your personal coverage shouldn’t be static.

You may have noticed some of the items in the list above are one-off events that occur at specific moments in time. Others take place over a range of years (like raising a family). Both kinds of changes can affect the type and amount of the coverages you need. If you haven’t reassessed your various policies in a long time, chances are your old policies no longer fully protect you because your exposures have changed significantly. Also, insurance rates have changed, and new products and solutions have been introduced to keep pace with evolving risks such as cyber threats to privacy and ID theft.

We’ve found that people often don’t take the time to stop and evaluate whether their personal insurance policies are still providing the coverage they need. It’s possible you are overdue for a review, and that you need a more comprehensive approach to protect your assets and guard against risk.

Finding the gaps and exposures

It’s important to determine where your gaps and exposures are today. To give a few common examples:

  • With umbrella coverage purchased a long time ago, we often find that the limit is now too low for how much a person’s wealth has grown.
  • Protection against being in a car accident caused by an uninsured or underinsured driver is not expensive to purchase, yet we regularly find people don’t have it because they did not purchase it when they got their first car insurance policy.
  • If you’ve accumulated valuables or collector’s items, purchased a recreational vehicle like a boat or RV, or purchased a rental property since your last insurance review, you may have gaps and exposures in your current plan even if you have purchased insurance for those assets separately.

Pinpointing the strengths and weaknesses

An objective review should look carefully at strengths and weaknesses in your current policies. It should evaluate how they fit together for comprehensive protection to minimize exposures, eliminate gaps, and reduce redundant coverages.

The insurance market is changing all the time, and so are the options. There could easily be opportunities for you to pay less for better protection. At PSA, we have relationships with a wide network of top insurance companies and extensive experience in tailoring the best protection for each client.

For more information, or to have us conduct an objective review of your personal insurance, please contact me at dfischer@psafinancial.com.