Why January is an ideal time to review your insurance policies
January is often considered a prime month to review insurance coverage policies for specific reasons
Insurance premiums are rising, and a recent survey by Trusted Choice revealed that 70% of Americans are actively reviewing their insurance policies with the goal of saving money.
FOX Business asked insurance experts about why January is an ideal time to look over your insurance plans to see how you can save.
Why you should assess your insurance coverage this month
January is often considered a prime month to review insurance coverage policies for specific reasons.
"First, it marks the beginning of a new year, making it a convenient time to assess your financial and personal situation," said CoverLink Insurance President Matt Simon. "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 your coverage still aligns with your current needs and circumstances, he said.
A couple reviews important documents in their home. (iStock / iStock)
A third reason, said Simon, is that 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 to ensure the coverage being purchased meets their needs.
Is there specific coverage that should be a priority for consumers?
According to Simon, priority coverage for consumers typically includes:
– Auto insurance: to cover potential accidents and liabilities on the road
– Homeowners or renters 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
PROPERTY INSURANCE RATES KEEP CLIMBING, WORSENING AFFORDABILITY CRISIS
How do external factors like natural disasters or supply chain issues affect a current policy?
Various external factors could affect an insurance policy and many consumers are seeing this in rising premium costs even if they haven’t experienced any claims, stated Nancy Germond, executive director of risk management and education at Independent Insurance Agents and Brokers of America.
"External factors like natural disasters or supply chain issues can affect insurance policies in various ways," she said. "For instance, if you live in an area prone to hurricanes or wildfires, your property insurance may see increased premiums or deductibles."
And, with weather changes likely and wildfires making adjacent flooding a possibility, flood insurance has become a major issue, she said.
"The standard homeowner’s policy does not cover flooding," Germond said.
If you live in a flood-prone area of the country, it is imperative to have flood insurance, said Loretta Worters, spokesperson for the Insurance Information Institute.
If you live in a flood-prone area of the country, it is imperative to have flood insurance. (Photographer: Nathan Howard/Bloomberg via Getty Images / Getty Images)
"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.
What are life events that could trigger a reassessment of your insurance coverage?
According to both Germond and Simon, these events include:
– 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
– Acquisition of valuable assets or investments
– Starting a business, including an in-home business
– A family member moves in or out of the home or a family death that leaves property vacant or in trust
– A young driver is added to your insurance
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Given rising costs, is bundling your policies advised?
Simon said bundling multiple insurance policies, such as auto and home insurance, can often lead to cost savings through discounts offered by insurers. However, he cautioned, that 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.