Personal lines property and casualty insurance (P&C) is designed to cover substantial losses on your home(s) and contents, autos, recreational vehicles, and certain smaller non-commercial properties (example: three-unit apartment).
As the former owner of a P&C insurance agency I understand that personal insurance expenses are annoying – particularly if you rarely make a claim or have had trouble getting your insurer to pay one. However, skimping on this insurance could have a substantial impact on your financial security.
It’s a good idea to annually review your coverage to ensure it is adequate and that your premium is still competitive.
What should you check?
- With home prices increasing, and building material shortages the replacement cost of your house may not have kept pace. Even if you have a broad guaranteed replacement cost policy, did you update or add certain rooms that weren’t reflected when you purchased the coverage? Did you add central air, solar panels or a high voltage electrical panel for your electric car?
- The market value of jewelry and fine art have also skyrocketed over the last decade. If you scheduled these items, you may want to have them reappraised and updated on your policy.
- With climate change, many areas are seeing more flooding. Even if your mortgage doesn’t require it, should you get flood coverage or add a supplemental policy to cover additional replacement cost? Should you consider earthquake coverage?
- Has your policy coverage changed? Over the years, many insurers have increased the wind deductible. Other insurers have narrowed coverage on extra cost endorsements. Often, insurers provide a coverage change letter describing these upon renewal.
- Where home policy loss deductibles previously were $500, often moving to a $1,000 or higher deductible can provide a substantial premium reduction if you’re comfortable with the increased risk.
- Are there additional operators on your cars or boats? If they are household members or regular operators, to be covered, they should be listed on your policy, even if they have their own policy. Conversely, if family members have moved out of your home and they are no longer regular operators, you might save by removing them.
- Are there areas where you could switch to self-insuring? If your car, bike or boat are old, the actual cash value may be so low that paying for collision coverage doesn’t make financial sense.
- Are there discounts that you could be missing? Now that you are working from home, are you in line for a low mileage discount? Are you able to get an affinity group discount? Did you lose one you had in the past? You may need to provide documentation to keep these on renewal. For homes, there are often alarm credits, senior or work at home credits, and heat and roof replacement credits.
- Are there payment plans offering discounts or removing billing charges for using EFT, credit cards or paying the annual premium up front that you could now use. On time payment using these methods could also move you into a better rate class – saving even more!
Bottom line – To avoid unnecessary losses, and potentially find savings, review your policy with your P&C insurance agent.
Jordan Hegedus, CLU, ChFC is based in Lynnfield and can be reached at jordan@gotobeaconlife.com
