I am certain that most people take a look at their insurance declaration pages (the first few pages of a policy highlighting limits and main coverages) as soon as they receive their hard copies, but never dig any deeper into the policy form. I wish more of my clients took an interest in the underwriting and clauses of their policies, as this language can change year to year. I understand most people do not have time to pour over these details, and instead place their trust in me to assess their needs on an annual basis.
Outside of an annual checkup, I always advocate for insurance evaluations, as clients often make lifestyle changes. Typically, these changes happen around large purchases and they will either add new limits to existing policies or introduce entirely new policies due to new exposures.
If you buy a new home (assuming you have a mortgage) you will need homeowners insurance. Your home is a large financial obligation that you would not want your partner or dependents to cover alone, and therefore considering life insurance would be advantageous. In addition, if you have life insurance coverage prior to the home purchase, you should consider increasing your coverage level.
By law, you are required to insure a new vehicle upon purchase. Hopefully you are not just using the state minimums for coverage and have properly insured the vehicle (I will get to this in another post). If you now have driving age children in your home, it would be beneficial to ensure you have the proper liability limits on your umbrella policy, as parents are held responsible if their children injure someone while driving.
Maybe you have not made a recent purchase to trigger a call to your agent and have just renewed your coverage over the last couple of years. As real estate values have started to rise back up after our recession, you may be at risk of being underinsured. Your policy limits may not have kept pace with your increasing property value. A $200,000 home 7 years ago may now be worth $400,000 and your homeowners’ policy may still have coverage limits closer to $200k than $400k.
The bottom line: You should be reviewing your insurance policies on an annual basis and anytime you go through a lifestyle change. If you do not receive an annual insurance checkup from your agent, you should ask for one. In addition, if you are about to make a large purchase, you should contact your agent to find out how the purchase will affect your policies, coverage and premiums.