New Year, New Coverage: Aligning Your 2024 Resolutions With Insurance Goals
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As the new year approaches, many Americans will undoubtedly set New Year’s resolutions in the hopes of improving the quality of their lives over the course of 2024. Going into 2023, some of the most popular New Year’s resolutions involved improving health, being more financially responsible and taking time away from social media to spend more time with loved ones. Before you set your own resolutions, it’s worth considering how insurance should factor into your goals for the new year.
Read below to learn about the various ways you can make sure your insurance policies are meeting your needs so you can decide what New Year’s resolution ideas you ought to consider for 2024.
1. Build a Better Budget
One of the best ways to combat economic uncertainty going into the new year is to reevaluate your family’s budget. An August 2023 study found that 71% of Americans have a negative view of the state of the national economy, 51% expect the economy to get worse and 38% have a negative view of their current financial situation. If you have similar concerns, consider taking the steps below to prepare for the new year as you start your New Year’s resolution setting.
Review Your Finances
It’s helpful to take a look at your spending patterns from the past year and look ahead to expenses you expect to incur during the upcoming year so you can think through how much money to save up and where you should be looking to cut costs.
For example, you could lower your homeowners insurance premiums by raising your deductible, which is the amount of money you have to put toward repairs or replacements yourself whenever you file a claim. If you opt to raise your deductible, make sure you set aside enough money to cover it in case a peril damages your home or belongings.
Review Your Insurance Policies
It’s commonly recommended that you review your insurance policies at least once per year to make sure you have an appropriate amount of coverage. While you could evaluate your policies individually as they come up for renewal, it may be helpful to look at all of them at once prior to the new year.
Think about how your coverage needs are likely to change during 2024 and identify which of your policies may not meet those changing needs. For example, if you are engaged, you may want to raise your home insurance personal property coverage limit to account for your spouse’s belongings after you get married. Meanwhile, if your child will turn 16 next year, you may want to shop around to see if you can find a better car insurance deal to account for the rising premiums you’ll face when you add a new car and an inexperienced driver to your policy.
Find Ways To Save on Insurance
There are numerous discount opportunities that are worth looking into to make sure you aren’t paying more for insurance than you have to. For example, if you rarely drive and are confident in your ability to consistently practice safe driving habits when you do, you could secure lower rates by signing up for a telematics program. In addition, if you buy home and auto insurance from different insurance companies, you may want to check if you could save money by buying both policies from the same company to earn a bundling discount.
2. Clean Your Home
Another resolution you should consider is thoroughly cleaning up your home and throwing out, selling or donating clothes and other items you don’t need anymore. You may also want to run through a home maintenance checklist to make sure your home’s structures and systems are in good condition so you can avoid unnecessary damage that could lead to costly insurance claims.
Once you’ve cleared up the clutter and settled on only the possessions that are really worth keeping, you may want to create a home inventory for homeowners insurance purposes. By keeping tabs on the number of valuable items you own and how much each of them is worth, you can determine whether your current personal property coverage limit is sufficient and provide proof to support your insurance claim in the event that those belongings are destroyed.
If you decide to make a home inventory, you should record information like what each item is, when you bought it and how much you paid for it at the time. It’s best to record this information digitally and upload it to the cloud since you could potentially misplace a physical inventory list or lose it due to a major peril like a house fire.
Check the Value of Your Home
You may also want to reevaluate your home’s replacement cost value so you can figure out if you need more dwelling coverage. In general, it’s recommended that you maintain enough dwelling coverage to completely rebuild your home in case it is destroyed by a covered peril.
Your home’s replacement cost value can increase over time due to rising construction prices. As a result, if your policy doesn’t come with an inflation guard endorsement that automatically raises your coverage limits to keep up with inflation, it may be worth hiring an appraiser to find out if your current coverage is sufficient.
Add Security Measures
Adding security measures can not only keep you and your family safer but also lead to insurance savings since insurers may be willing to offer you discounts if you take steps to lower your chances of filing a claim. For example, installing a home security system can lower your home’s exposure to theft. You could also get a discount for other loss prevention measures such as installing smoke detectors and sprinkler systems that can mitigate the impact of fire on your home.
3. Take Care of Your Health
Many Americans become more conscious of their health around the new year, with exercising more, eating healthier and losing weight topping the list of New Year’s resolutions going into 2023. While pursuing a healthier lifestyle should reduce your health care costs in 2024, it’s still important to maintain appropriate health insurance coverage to protect yourself against worst-case scenarios.
Health insurance open enrollment lasts through January 15 in most states, so you’ll only have a couple of weeks after New Year’s Day to settle on a Marketplace health plan that suits your needs. Keep in mind that your health status and medical history don’t impact Marketplace health insurance premiums, which means it may be worth enrolling in a plan now even if you aren’t currently in good health.
If your 65th birthday will take place in 2024, you may want to get ready to transition from your private health insurance to Medicare. You’ll get Medicare Part A for free if you or your spouse paid Medicare taxes for at least 10 years, while your Part B premium will depend on your income. Alternatively, you could go through a private health insurance company and enroll in a Medicare Advantage plan, which includes all of the other parts of Medicare and may also come with extra coverage types like vision and dental insurance.
If you expect to have dependents who will rely on your income at some point in your life, then it’s never too early to start thinking about life insurance. Age is one of the primary factors impacting life insurance rates, so it’s usually best to purchase coverage sooner rather than later.
That said, insurance carriers will also take your health status into account when setting your life insurance premiums. As a result, if you are currently in poor health, you may want to focus on improving your health as a New Year’s resolution so you can lock in a low life insurance rate later in the year.
4. Grow Your Wealth
If you are a small business owner, you could also benefit from setting New Year’s resolutions related to your business in order to grow your wealth over the course of 2024. Take a look at our suggestions below for more information on how you can protect your business financially during the new year in order to save more money.
Start an LLC
One crucial way you can protect your finances is to convert your business into a limited liability corporation (LLC). As the name suggests, setting up an LLC will limit your personal liability for business-related debts and claims since the LLC is its own entity for legal purposes.
For example, if a disgruntled client sues your LLC for negligence, your personal assets such as your home and the money in your personal bank account will not be at risk and instead any judgments or settlements will have to come out of the company’s funds.
Protect Your Current Business or New Business
Meanwhile, it’s crucial to make sure you maintain an appropriate amount of commercial insurance to protect your existing businesses and new businesses alike from financial losses due to damaging perils and liability concerns. Chances are you already have commercial auto insurance and workers’ compensation insurance for your current business since these are required by law for many companies.
However, no matter how long you’ve been in business, you may also want to consider adding coverage types like these to your commercial insurance policy:
- Business owners policy (BOP), which usually includes general liability insurance, commercial property insurance and business interruption insurance
- Professional liability insurance, also known as errors and omissions (E&O) insurance
- Cyber insurance
- Commercial umbrella insurance
- Employment practices liability insurance (EPLI)
- Directors and officers (D&O) liability insurance
- Commercial crime insurance