Sunday, February 7, 2010

Conduct Your Own Insurance Audit

Many of us re-assess our finances or our health at milestones such as a new year or season. It is more rare that we step back and evaluate our insurance needs.

Lisa Lobo, vice president of personal lines underwriting for The Hartford Financial Services Group says a lot of changes can happen throughout the year that can greatly impact your insurance coverage, but when policies are out of sight and out of mind, we can sometimes fail to make the necessary adjustments to ensure we are fully protected.

Here are four areas that Lisa recommended paying attention to when conducting a self-audit of insurance:

  • Take an inventory of your valuables and add personal articles coverage for customized protection;
  • Make sure your life insurance coverage is adequate based on life changes;
  • Adjust your auto insurance coverage as your needs change, and ask about additional discounts;
  • Get renters insurance or update your current policy if you do not own your residence.
If you received gifts or treated yourself to treasures such as fine jewelry, furs, golf clubs, and electronics. According to The Hartford, these items often are not covered under a standard homeowner's or renter's insurance policy.
"Often, the limit on yourt policy may not be sufficient," Lobo said, adding that it is always best to keep copies of appraisals and receipts. It can be more difficult to determine the value of antiques or one-of-a-kind items without an appraisal.
If you need more than $5,000 of protection for valuables, a personal articles floater allows you to list them and their value for more customized protection. This added coverage is well worth it if the items are damaged, lost or stolen.
"An insurance company will not pay beyond what you secured as coverage," Lobo said.

If you don't already have a life insurance policy, get one. And with each life change, your life insurance coverage should be reviewed as a simple way to save you and your beneficiaries time, frustration and money. If you recently welcomed a new baby, you should make sure that there are enough resources to provide for your child in the event that something happens to you or your spouse.
Other life changing events that can affect your coverage include getting married or divorced, becoming widowed, and changing jobs or being promoted.

If you've retired, changed jobs, or sent a child to college, you might be eligible for increased discounts on your auto insurance. Once you retire, you aren't racking up as many commuting miles, which will likely result in a decrease in your rates.
 Telecommuting also can allow you to take advantage of low-mileage discounts. "There are often credits or discounts or special rates applied based on the way you use your vehicle," Lobo said.
The Hartford also recommends notifying your insurance company if you have a child that will no longer be driving a vehicle covered under your policy -- such as a child away at college -- as this could result in savings.
"There's always opportunities to look for how to improve the price you pay," Lobo said.

 If you own your home, you should reassess your coverage to make sure it's adjusting to accommodate changes in home value and to ensure current rates are competitive.
Also, it's a good idea to capture video footage of all the contents in your home and to keep a log of when your policies are up for renewal.
Lobo recommended securing enough coverage to replace your home if it is severely damaged by an act of nature or you lose it entirely in a catastrophic event.
"Also think about credits," for deadbolt locks or alarm upgrades, she said.
Finally, if you're a renter, remember that a landlord's insurance only covers his property, not the renter's contents within the apartment or condominium.
"Up to $15,000 is usually what we see as minimum coverage," Lobo said.
Most renter's insurance policies offer both protection of property and liability coverage - in the event someone is injured in your unit.
 Personal items can be costly to replace if you don't have the necessary coverage, so assessing coverage periodically and especially after you've made a major purchase is important. It's also important to update a renter's policy when a roommate moves out and you've co-owned personal property.
"The landlord is not responsible for replacing a renter's (personal) property," Lobo said.

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