Welcome to the 21st century: the ever changing and evolving age of information and technology. The way we communicate and interact with others has been revolutionized by social media and email. Smartphones, tablet computers and wireless internet allows us to work anytime, anywhere. Everything around us, from the cars we drive to the way we produce electricity, is quickly being transformed by technology.
In the shadow of all this technological progress, you know what probably hasn’t changed much? Your lonely and unloved insurance policy. Filed away in some forgotten drawer, it probably hasn’t been updated since the VHS tape went extinct. Your 20th century insurance policy very likely needs a 21st century update.
Remember, insurance is not a one-size-fits-all solution. Sitting down with your agent every year or so is a great way to ensure your coverage still provides fits your individual needs. Contrary to popular belief, an insurance review is not a sales tactic to get you to buy more coverage. Instead, it is a way to evaluate policy limits, deductibles, available discounts and discuss any life changes that might affect your insurance.
We find the following types of insurance coverage are often neglected and need to be reviewed frequently:
- Homeowners insurance: Especially pay attention to the coverage “A” or Dwelling limit. Despite the depressed real estate market in Nevada, you may find your coverage is not adequate to rebuild your home. Another concern is the personal liability limit. If you only have $100,000 to $300,000 considering increasing the limit to $500,000 or higher. The difference in price is usually only a few dollars per year.
- Auto insurance liability limits: The required minimum limit of $15,000/30,000/10,000 has not changed since 1979 (NRS 485.185). The cost of vehicle repairs and injury claims, however, has increased dramatically in the last 30 years. We recommend you consider purchasing higher limits of liability and, much like homeowners insurance, the cost difference is surprisingly small.
- Comprehensive and collision deductibles: If your vehicles are older, it might be time to drop physical damage coverage. Consider the current market value of your vehicle (use Kelly Blue Book as a reference) and weigh that against the cost of the physical damage coverage, plus your deductible. For example, if you are paying $250 per year for comprehensive and collision coverage and have a $500 deductible, your true insurance cost is $750. If this cost represents 25% or more of the vehicle’s value, it might be time to drop the coverage.
- Available Discounts: Insurance companies advertise a mind boggling number of discounts to prospective customers. Those discounts are also available to existing customers, but often only if you ask for them. For example, many insurance companies give discounts for education level and occupation (i.e. teachers, civil servants, physicians, military). Other examples of discounts include alarm systems, mulitiple policy or package credit, defensive driver, renewal, passive restraint, low mileage and early signing.
- Life Insurance: Are your benficiaries up to date? Does the coverage limit reflect your current needs? Have you compared term life insurance rates in the last few years? Life insurance policies are notorious for being a “buy it and forget it” purchase but they should be reviewed and updated just as often as your auto and home insurance policies.
- Life Changes: Take a look at our article entitled “Keep Your Insurance On-Target” about events in your life that might warrant a review of your insurance policies.
If you think your insurance policies might be out-of-date, please contact us for a no-obligation review. It is completely free and only takes about 30 minutes. We look forward to speaking with you!