How often should I review my insurance policies?

We all know that the purpose of getting an insurance policy is for peace of mind, knowing that your home or contents are covered. Once you get an insurance policy, this is exactly how you should feel, and it shouldn’t detract from what you do day to day. After all, it is a back-up in case something goes wrong. You should however, check it periodically, because you want to make sure you are getting the best deal possible.

Why it is Crucial to Review your Policy Annually

If you are unconvinced as to why an annual check-up of your home insurance policy is absolutely critical, consider this: 5 years ago you bought a home for $300,000. You took out an insurance policy covering damages for that amount. Let’s say the housing market has been strong, and now your home is worth $500,000. In the case of fire, or another disaster that renders your home uninhabitable or in need of serious repair, the amount you are insured for may not cover the amount required for repairs. This is because the landscape has changed since you took the policy – inflation has occurred, property prices have increased and so have the cost of repairs.
Because you didn’t check your insurance policy, you are now left out of pocket.
1.      When your policy comes up for Renewal, Always…
 
·         See if the value of your home and contents has changed
·         See if there are any discounts or offers
·         See if there are any changes in the terms
·         See if there are similar policies at better prices from competitors
 
2.      Have your Home or Contents increased in Value?
 
If you have carried out major renovations or have a new car or jewelry, for example, then the value of possessions to be insured has increased. This means your policy needs to reflect this change.
 
3.      Safety Measures can Make your Policy Cheaper
 
Insurance policies vary in price according to the perceived risk of theft or damage. The safer your home is deemed to be by the insurer, the more willing they are to give you a good price. If you have installed safety measures like burglar alarms, smoke detectors, improved heating, plumbing and electrics, tell your insurance company – you become a safer bet in their eyes and they might give you a reduction in your payments.