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Importance of Annual Insurance Evaluations
How reviewing your insurance policies saves you money

Insurance policies are living documents. As your needs and circumstances change, so too should your insurance change to reflect them. Done properly, you’ll come to view your annual insurance evaluation not as a chore but as an opportunity to save money and better secure your future.

Finding discounts

Annual insurance evaluations provide a great opportunity to review your situation and reduce your premiums. For instance, if you are a small business owner and the nature of your business changed over the last year, your policies may cover risks that no longer exist. Alternatively, you may have sold a building that is still scheduled for your property policy.

Sorting through your insurance coverage and eliminating redundancies can go a long way toward improving your bottom line. “You don’t need to insure hired autos and non-owned autos under your general liability policy if those vehicles are covered by your commercial auto policy,” writes Gregory Boop in a March 2018 article for TheBalance’s Small Business. “Ask your agent for assistance if you need help identifying overlapping or duplicate coverages.”

Changes in circumstance

Changes in your life need to be reflected in your insurance policies. If you got married, had a child or bought a new home, you have good reason to review your life insurance policies. If you renovated or upgraded your home, its value may have changed as well as the coverage you need. Even small changes can have an impact. “For example, perhaps you have disassembled the trampoline, paid off the mortgage, installed a burglar alarm or installed a sophisticated sprinkler system. If this is the case, simply notifying the insurance company of the change(s) and providing proof in the form of pictures and/or receipts could significantly lower insurance premiums,” an Investopedia article states.

Discovering new features

Insurance companies are regularly adding new products and services to attract customers from competitors and to ensure their existing customers stick around. Your annual insurance evaluation is a good time to review these new features, whether they can serve you and whether you qualify. If you do, it can potentially save you money in the long run. According to Investopedia , “Loyalty often pays, too. The longer you stay with some companies, the lower your premium can become, or the lower your deductible will be.”

Correcting errors

The insurance rate on one of your policies may have gone up for a reason you believe illegitimate. Your annual insurance evaluation provides a good opportunity to correct the mistake and identify others. This is especially important regarding your driving record, which is not only used by auto insurance companies to determine your rates but also by life insurance companies, especially if you are still young. “Driving records can fill in the blanks before lifestyle habits have had a chance to impact health,” Barbara Marquand writes in a January 2017 article for NerdWallet.com.

As a result of database errors, you may sometimes discover that your insurance has raised your rates because it believes you were involved in an incident in which you actually had no part. Catching these errors and striking them from your record can help you avoid hefty insurance rate hikes.

Though evaluating your insurance policies every year can seem like a drag, it’s a useful and important method for getting the most out of your policies, ensuring you don’t pay more than the necessary and that you take advantage of any new benefits resulting from new policy features or changes in circumstance. Sorting through all of that paperwork can certainly be headache-inducing, and you might still miss something in the end. That’s why you should perform your annual insurance evaluation alongside a professional who will be able to help you identify all of the ways you can save money.



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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.


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