How Do I Review My Insurance Policies?

You should consider reviewing your insurance policies annually or whenever you experience a major life change by looking over your coverage amounts, deductibles and premiums and deciding whether your current policy effectively meets your ever-changing insurance needs. Reviewing insurance periodically can help you save money and make sure you’re maintaining the right coverage for your unique circumstances.

Keep reading to learn how to review insurance policies and why it may be beneficial to switch to a different insurance carrier from time to time.

Key Takeaways Experts commonly recommend that you review your insurance policies every time you experience a major life event and once per year otherwise. Some of the major life events that should prompt you to reevaluate your coverage needs include marriage, childbirth or adoption, graduation, retirement, the death of a loved one and certain birthdays. By going over your insurance policies every so often, you can figure out which policies aren’t efficiently meeting your needs anymore, learn how to update your coverage to match your current needs and look for opportunities to cut costs. Shopping around is one of the best ways to save money on insurance since different insurance carriers have different standards for evaluating risk and one carrier may view your circumstances more favorably than another.

Why Is It Important To Review My Insurance Policies?

Reviewing your insurance policies is important because it helps you evaluate whether your current coverage is still meeting your needs and whether you could get a better deal by shopping for insurance elsewhere. Coverage needs can change over time, so a once-useful insurance policy could cease to provide sufficient coverage later on.

In addition, insurers have different methods for measuring risk, which means one insurance carrier could view your situation more favorably and offer you a more affordable quote for a home or auto policy than another carrier. Even if you already have a policy, it’s a good idea to shop around and compare quotes fairly often so you don’t miss out on a lower price for the same coverage from a different insurance company.

How Often Should I Review My Insurance Policy?

It’s recommended that you review all of your insurance policies at least once per year.^[1] You may opt to review your policies individually as they come up for renewal each year or you could instead set aside a time to go over all of your insurance policies at once every year.

You should also review your policies anytime you experience a major life event that could significantly alter your insurance needs. Examples of such life events include marriage, graduation, retirement, job changes and relocation to a different home.^[1]

What Should I Include in My Insurance Review?

As part of your insurance review, you should look through all of your existing policies such as homeowners insurance, car insurance and health insurance. You should also think about additional policies you don’t already have but may want to purchase such as life insurance.

Some of the main details you’ll want to pay attention to during your insurance review include what is and isn’t covered by your policies, what your coverage limits are, how much you’re paying for coverage, what company insures you and what your deductibles are.

Fully understanding these details can help you decide whether you’re paying an appropriate amount for insurance, whether you have the right amount of coverage and whether your current policies take into account all of the risks you face in your day-to-day life.

How To Review Each of Your Insurance Policies

The following sections will explain the main types of insurance policies you’ll need to review and what factors you should take into account as you go over these policies.

Car Insurance Review

To make sure you’re getting the most out of your auto insurance coverage, you should consider how your circumstances have changed over the past year and whether they have created gaps in your current coverage or savings opportunities you are missing out on. For example, if you quit your office job and started working from home, you could save money by switching to a pay-per-mile car insurance policy.

Similarly, you should evaluate whether you still need all of the coverage types included in your policy. While you were likely required to buy comprehensive and collision coverage if you took out an auto loan, you may be able to drop these coverage types and lower your premium if you have finished paying off your loan and the Kelley Blue Book value of your vehicle has dipped below 10 times the amount you are paying for physical damage coverage.^[2]

One major life event that has the potential to significantly impact your auto insurance prices is a child’s 16th birthday. Teens have the highest crash rate of all age groups due to their lack of driving experience and their tendency to engage in risky behaviors like speeding, making teenage drivers among the riskiest and most expensive types of drivers to insure.^[3] As a result, it’s especially important to shop around before adding a 16-year-old to your policy so you can try to mitigate your rate increase as much as possible.

Homeowners Insurance Review

At the start of your home insurance review, you should make sure you have an up-to-date home inventory that records the value of your most important possessions so you can decide whether you have enough personal property coverage on your homeowners or renters insurance policy. Keep in mind that major life events can also change your personal property coverage needs. For example, if you just got married and your spouse has moved in with you, then you will likely need to raise your coverage limit to account for your spouse’s belongings.

Rebuilding costs can go up naturally over time, so if your policy doesn’t include an inflation guard endorsement, you may also want to consider raising your dwelling coverage limit each year. Additionally, home renovation projects have the potential to raise your home’s replacement cost rapidly and may also necessitate a home insurance review.

Finally, you should use your homeowners insurance policy review as an opportunity to look for new discount opportunities. For example, if you have home and auto insurance policies from different insurers, you should check to see if either of them offers a bundling discount that would make it cheaper to purchase both types of policies from the same company.

Health Insurance Review

During open enrollment, you should evaluate how your health care needs have changed over the past year and whether those needs would be better served by a different Medicare Advantage or Marketplace health insurance plan. For example, if someone in your family has been diagnosed with a chronic illness that will require regular medical care, you may want to switch from a high-deductible health plan (HDHP) to a plan in the gold or platinum tier that will cover a greater portion of your medical expenses.

Adding someone new to your family is one of the biggest life events that should prompt you to reevaluate your health insurance needs. While your children aren’t automatically covered by your health plan, you will qualify for a special enrollment period that allows you to add new people to your plan or switch to a different plan whenever you have a baby or adopt a child.^[4]

In addition, if you apply for a new Marketplace health plan within 60 days of the birth or adoption, your coverage will retroactively apply starting on the date of the birth or adoption.^[4] This means your health plan may cover your baby’s hospital bills if they have to stay in the neonatal intensive care unit (NICU) for a couple of weeks even if you don’t enroll in the plan until a month after bringing your baby home.

Life Insurance Review

If you have term life insurance, you should keep track of when your policy will expire and consider whether you can and should purchase additional coverage as part of your life insurance review. Meanwhile, if you have permanent life insurance, you should check how much cash value your policy has accrued and determine how to use it. You can usually put this money toward your premium payments but you may have to lower your death benefit, agree to pay the cash value back or cancel your policy outright to withdraw cash value for personal uses.^[5]

For the most part, your life insurance company will allow you to change your beneficiaries at any time, which may be necessary after certain life events.^[6] For example, if you get divorced and then remarry, you may want to swap out your ex-spouse for your new spouse on your life insurance policy. Alternatively, if you list a child as your beneficiary and they die before you, you could opt to select a grandchild as a beneficiary in their place.

During your life insurance policy review, you should note that you may not be able to easily adjust your policy’s death benefit unless you have universal life insurance.^[7] So while swapping beneficiaries should be easy enough, adding brand new beneficiaries may result in each beneficiary getting a smaller portion of the death benefit if you have a basic term or whole life insurance policy.