Keep Insurance Updated with Major Life Changes and Purchases
As life circumstances change, it is important to review insurance coverage. There are several issues every policyholder should consider when doing this.
Marital Status
Married drivers typically qualify for auto insurance discounts. If couples have two cars, it is usually best to insure them on the same policy. With home insurance, it is important to update coverage, and be sure to consider any new valuables for coverage increases. Life insurance is also an important topic after marriage. Both working and non-working spouses should have life coverage, and this is especially true with couples who have or plan to have children. The death of a working spouse means a loss of income, and the death of a spouse who stays home to care for children means the loss of a care provider and the need to pay for childcare expenses.
Children
People who have children or add more to their family must consider life insurance. It is important to keep the amount updated for future beneficiaries. Also, it is important to consider disability insurance increases with every child added to a family. In the event of the main earner becoming disabled, there will still be adequate income. This is not true if people plan to rely solely on government disability benefits. When children become teens, it is cheaper for parents to add them to their auto policies than to let the teens buy their own coverage. Parents may also qualify for a discount when the teens are away to college or not around to drive for a certain period of time.
Income Changes
People who have disability and life insurance through a former employer can replace that coverage with individual policies. For people who receive an income increase or take on additional financial commitments, it important to review and adjust coverage as needed. In the event of an income decrease, some people wish to cut their premiums. A good choice for this is term life insurance.
Living Changes
Major home improvements call for additional or adjusted insurance coverage. It is important to avoid being under-insured. Be sure to count new structures on the property. Whether it is adding a shed or improving a garage, be sure to report it to the insurance company and make adjustments accordingly. Large purchases such as furniture may also need additional coverage. People who plan to buy a second home should research insurance costs for that home before making a purchase, and flood insurance is a smart choice for homes near water or in flood-prone areas.
Valuables
After purchasing valuables such as fine art, antiques, jewelry, firearms and expensive electronics, it is important to have them properly insured. Standard home insurance policies only offer limited coverage for these items, so it is wise to obtain a separate policy or endorsement for them. All items must be appraised with receipts before doing this.
Renting
People who rent are not protected by the property owner's insurance for the building. While the building itself is covered, the belongings of the renters are not. Purchasing renters' insurance is a smart idea. Renters can choose from insuring their items for actual cash value or replacement costs. Discuss these options with an agent to determine which is best.
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