January is an ideal time to review your insurance policies
Average annual auto insurance is $2,542: Bankrate
Homeowner's insurance costs on the rise
A California homeowner laments the skyrocketing cost of insurance.
Insurance premiums are on the rise for many Americans already battling higher costs due to inflation.
Roughly 70% of people are actively reviewing their insurance policies with a goal of saving money, according to a recent survey by Trusted Choice, which represents members of the Independent Insurance Agents & Brokers of America.
FOX Business asked experts about why January is an ideal time to look over insurance plans and policies in search of savings.
Assess your insurance coverage in January
The first month of the year is often considered a prime month to review insurance policies.
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"First, it marks the beginning of a new year, making it a convenient time to assess your financial and personal situation," said Matt Simon, a Trusted Choice independent agent, Trusted Choice board member and president of CoverLink Insurance in Columbus, Ohio.
"You may have experienced changes in your life or finances over the past year that could impact your insurance needs." Also, many insurance policies renew annually, so January is an excellent time to ensure that coverage still aligns with current needs and circumstances, he said.
A third reason, said Simon, is many people are preparing or reviewing their annual budget, and the cost of insurance is often a significant expense, making January an ideal time to not only review the cost, but ensure coverage is adequate.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AIG | AMERICAN INTERNATIONAL GROUP INC. | 76.88 | -0.26 | -0.34% |
| MET | METLIFE INC. | 88.23 | -0.02 | -0.02% |
| PRU | PRUDENTIAL FINANCIAL INC. | 129.41 | -0.11 | -0.08% |
| ALL | THE ALLSTATE CORP. | 207.39 | +0.11 | +0.05% |
Prioritizing coverage
- Auto: to cover potential accidents and liabilities on the road
- Homeowner's or renter's insurance: to protect your dwelling and personal property
- Umbrella liability: to provide an additional layer of liability protection when underlying policies such as home, renters or auto are insufficient to cover a claim
- Life insurance: To provide financial security for your loved ones who depend on you
How do external factors like natural disasters or supply chain issues affect a policy?
"External factors like natural disasters or supply chain issues can affect insurance policies in various ways," Nancy Germond, executive director, risk management and education, at Independent Insurance Agents and Brokers of America, based in Alexandria, Virginia, told FOX Business.
A Mercy Worldwide volunteer assesses a charred apartment complex in the aftermath of a wildfire in Lahaina, western Maui, Hawaii, Aug. 12, 2023. (Yuki Iwamura/AFP via Getty Images / Getty Images)
"For instance, if you live in an area prone to hurricanes or wildfires, your property insurance may see increased premiums or deductibles," Germond said.
And with weather changes, flood insurance has become a major issue, she said.
"The standard homeowner’s policy does not cover flooding," she noted.
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Homes along Gross Loop off KY-15 are flooded from the North Fork of the Kentucky River in Jackson, Ky., July 28. (Arden S. Barnes/For The Washington Post via Getty Images / Getty Images)
If you live in a flood-prone area, it is imperative to have flood insurance, Loretta L. Worters, spokesperson with the Insurance Information Institute, stressed.
"Homeowners insurance does not cover flooding, and you can get flood insurance through the federal government’s National Flood Insurance Program and also from private insurers," she said.
A groom places a wedding ring on his bride's finger. (iStock / iStock)
Life events that could trigger a reassessment of coverage
- Marriage or divorce
- Birth or adoption of a child
- Home purchase or renovation such as a kitchen remodel or room addition
- Change in employment or income
- Major medical conditions or health changes
- Retirement
- Acquisition of valuable assets or investments
- Starting a business, including an in-home business
- Family member moves in or out of a home or a family death that leaves a property vacant or in trust
- A youthful driver is added to your insurance
Workers install electrical wiring during a home renovation. (iStock / iStock)
Given rising costs, is bundling your policies advised?
Bundling multiple insurance policies, such as auto and home insurance, can often lead to cost savings through discounts offered by insurers, said Coverlink's Simon.
Used cars for sale on the sales lot at Fast Trax Auto in El Cerrito, Calif., May 6, (Justin Sullivan/Getty Images / Getty Images)
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However, he cautioned, it’s essential to review the individual policies within the bundle to ensure they meet your needs and offer competitive pricing.
"It’s not always advised in every situation, so it’s crucial to assess the specifics of your insurance requirements," Simon added.