Keep Insurance Updated with Major Life Changes and Purchases

March 16, 2015

As life circumstances change, it is important to review insurance coverage. There are several issues every policyholder should consider when doing this.

Marital Status
If married couples have two cars, it is usually best to insure them with the same carrier. With home insurance, it is important to update coverage, and be sure to consider any new valuables for coverage increases. Life insurance is also an important topic after marriage. Both working and non-working spouses should have life coverage, and this is especially true with couples who have or plan to have children. The death of a working spouse means a loss of income, and the death of a spouse who stays home to care for children means the loss of a care provider and the need to pay for childcare expenses.

People who have children or add more to their family must consider life insurance. It is important to keep the amount updated for future beneficiaries. Also, it is important to consider disability insurance increases with every child added to a family. In the event of the main earner becoming disabled, there will still be adequate income. This is not true if people plan to rely solely on government disability benefits. Parents may also qualify for a discount when the teens are away at college.  There are also discounts available for good students.  

Income Changes
People who have disability and life insurance through a former employer can replace that coverage with individual policies. For people who receive an income increase or take on additional financial commitments, it important to review and adjust coverage as needed. In the event of an income decrease, some people wish to cut their premiums. A good choice for this is term life insurance.

Living Changes
Major home improvements call for additional or adjusted insurance coverage. It is important to avoid being under-insured. Be sure to count new structures on the property. Whether it is adding a shed or improving a garage, be sure to report it to the insurance company and make adjustments accordingly. Large purchases such as furniture may also need additional coverage. People who plan to buy a second home should research insurance costs for that home before making a purchase, and flood insurance should also be considered.

After purchasing valuables such as fine art, antiques, jewelry, firearms and expensive electronics, it is important to have them properly insured. Standard home insurance policies only offer limited coverage for these items, so it is wise to obtain a separate policy or endorsement for them. Higher valued items may require an appraisal.

People who rent should consider purchasing their own renter’s insurance.  Typically, the property owner’s insurance does not cover the renter’s belongings.  Renters can choose from insuring their items for actual cash value or replacement costs. Discuss these options with an agent to determine which is best.

Click here to return to Amity Insurance E-Newsletter January 5, 2015.