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How To Review Your Insurance Policy

Many people review and change their insurance policy after a significant life event that requires revised insurance coverage — for example after they get married, upgrade their car or purchase a new home. But people often forget to review their insurance regularly regardless of life-changing events; doing this allows you to make sure that your coverage is adequate for when you need to file an insurance claim. You can also mitigate your costs by shopping around for lower premiums. It is recommended that you review your insurance coverage at least once a year to make sure you, your car, your home and your family are appropriately protected at the lowest price. An insurance review is a detailed and comprehensive look at your insurance coverage.

What To Include in Your Insurance Review

  • The type of policy you have: One of the most important things you should know is the type of policy you need. Is it life insurance, health insurance, car insurance, long-term care insurance, property insurance, disability insurance or casualty insurance? If you are reviewing a life insurance policy, you’ll need to choose whole life, term life, variable life or universal life. If you have car insurance you will have to select personal injury protection, auto liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage and collision coverage.
  • Your insurance carrier: What insurer provides your coverage? Make sure you have up-to-date customer service information and your insurance agent number.
  • Your policy number: Your policy number is always necessary when reviewing our coverage and speaking with your insurance agent. 
  • Date issued: The date your insurance was issued is important because most policies only cover a certain period of time. After that you will have to renew your lapsed policy at a higher price.
  • Premium required: It's a good idea to monitor how much you pay for your premium monthly. Always keep track of the premium you pay and how often it is paid.
  • Who is covered: Do the benefits apply to you, your spouse or a dependent? If you have car insurance, does it cover other drivers? If you have renters or home insurance, does it cover your roommate or anyone else living there?
  • Beneficiaries: Beneficiaries receive the policy benefits as stated by your plan. Life insurance is the most common insurance plan that has beneficiaries. It’s good to make sure your beneficiaries are up-to-date. If you have an ex-spouse who was a beneficiary during marriage, you may want to remove their name from your policy.
  • Review all the details: Once you ensure that all the basics have been reviewed, you should go over the details of your policy so you understand what it covers and how claims are filed. This includes benefits, billing, restrictions and payouts. You can see if you have duplicate coverage, are underinsured or have too much coverage.
Make sure that your coverage is adequate for when you need to file an insurance claim.

How To Review Specific Types of Insurance

Each policy you have covers a different set of needs with specific features. Below is an overview of what you should look for when reviewing your insurance.

Car Insurance Policy Review

It is recommended that you shop around for auto policies every six to 12 months to make sure you are getting the best possible rate for your auto insurance. Car insurance companies can change their rates daily, and if you had an accident or traffic tickets your rate can go up significantly. When you shop around, you get a chance to be reviewed and re-rated by other car insurers. If you find a lower rate outside of your policy renewal, you can switch insurance companies with no fine. You will have to review your current policy’s rules and terms to confirm if there are cancellation fees or penalties for canceling mid-term.

Homeowners Insurance Policy Review

When reviewing your homeowners insurance policy, you should create an up-to-date home inventory that lists all your jewelry, electronics, instruments and other valuables. It might sound like a daunting task, but there are many apps that can make this process easy. Having accurate and current information for your possessions can make it easier if you ever have to file a claim, and to help you determine what kind of policy is best for you.

Your home inventory should include all your possessions, when you bought them and for how much. Your insurance needs can change over time, but by reviewing your policy every year, you can ensure that you are properly covered. Your policy review is also a good time to look for discounts that you might qualify for. If you combine your home or renters insurance with car insurance in a bundle for a discounted rate, you should also review your car coverage at this time to see if there are any safe driving discounts you are eligible for.

If you have made any renovations to your home, be sure that your policy reflects the changes. Updated appliances can also increase the value of your home. Make sure that your home is insured for the estimated cost to rebuild in the event that you have to replace your entire house after a loss.

Health Insurance Policy Review

For people who have health insurance, you should ensure that you understand your maximum out-of-pocket costs and your deductible. The deductible is the amount you will need to cover first before insurance funds kick in. The maximum out-of-pocket is a limit on how much you have to pay out-of-pocket over a full year. For example, if you have a  policy that has a $3,000 deductible and a $6,000 maximum out-of-pocket cost, you'll want to keep $9,000 available. You can use a health savings account or emergency fund to help save the money needed. You will also have to go over the portion of cost that will be paid when insurance kicks in and if there are any copays or fees.

Review your insurance coverage at least once a year to make sure you are protected at the lowest price.

Life Insurance Policy Review

For life insurance, you will want to understand the total death benefit, which is the amount paid out to beneficiaries upon the death of the policyholder. You may also want to sign up for additional riders, like a waiver of premium in case of disability. Some life insurance plans allow you to access the death benefit early if you have been diagnosed with a terminal illness. Policyholders with a term policy will need to remind themselves when the policy is set to expire, at which point they will need to go over their options and decide if life insurance coverage is still needed. You can track how well your life insurance policy performs if it has a cash value by requesting the data from your insurance agent. If your policy has done well, you might be able to forfeit premiums. However, if the policy has not done so well, your premiums may go up in price.

FAQs

How often should I review my insurance coverage?

You should review your insurance coverage at least once a year, and more often if you have a major life change.

How often should you change your coverage?

There’s no rule for how often you can change your coverage, but it’s a good idea to review your insurance policy every year to make sure you are getting the best deal available.

Why do you need to review your insurance policy?

Reviewing your insurance policy every year or after a major life event helps ensure you know what to expect from your coverage in the event that you need to file a claim. It also allows you to make informed decisions about your coverage while being proactive about keeping your insurance costs low.

Review Your Policy To Keep Your Costs Low

Your insurance policies are designed to protect you, your loved ones and your possessions in the event of an unexpected covered peril. SmartFinancial can help you shop around to make sure you have the best coverage available for your budget and specific needs. Just enter your zip code below and answer a few quick questions to receive your free insurance quotes.

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