Performing an insurance check-up
As the new year starts, take time to review your policies.
DENVER (Dec. 29, 2017) – As the year takes shape, most of us will not keep our new year’s resolutions. However, one thing you can do at the beginning of 2018 that will pay off throughout the year is an insurance check-up. Some time spent now can pay off throughout the year.
Health insurance has its annual open enrollment period, whether we get it from an employer or buy it for ourselves. But the other insurance we have - homeowners, auto and life insurance - don’t have an annual enrollment period that demands our attention. Instead, we get renewal notices or descriptions of our current coverage. They go into our physical or virtual to-do pile, and often we do nothing.
When we don’t look at the renewals, we not only miss out on finding out about our policies, but we lose the ability to take advantage of discounts, better coverage, or even the possibility of shopping for a better product from a different company.
But it doesn’t have to be this way. As 2018 creeps up on us, the Division of Insurance (DOI), part of the Colorado Department of Regulatory Agencies, encourages consumers to perform an insurance check-up. You may want to talk to your insurance agent or the insurance companies, or you may want to pull out the policies (and the latest renewal) for a read-through, or you may want to do both. Ultimately, you want to determine if you need more coverage, less coverage, or different coverage, and if can you save money or get more coverage for your money.
Your vehicle is a year older now. You need to know if your auto insurance is still right for your car. Remember, older cars need a different level coverage than newer cars.
- Do you still need comprehensive coverage (coverage that protects you from damage not caused by road accidents - like a runaway cart in a parking lot or hail damage)? Can you get away with just collision coverage?
- Decide on the appropriate level of coverage, based on the age and value of your vehicle.
- What about the deductible? Can you afford a slightly higher deductible this year (and the lower premium that comes with it)?
- Check on your liability limits to make sure you have enough protection against injury and damage if you or one of the drivers in your household causes or contributes to an accident.
- Lastly, find out if you’re eligible for any discounts - safe driving, taking a defensive driving course, good student (for the teens and college students on your policy), and others.
There are two things to think about when it comes to homeowners insurance - your home and your stuff. As you do your insurance check-up, realize that in many places around Colorado, home values have increased. Changing home values, as well as increasing material costs, can impact how much insurance you should have and how much it will cost to rebuild or repair your home should it be damaged by a fire, a hail storm or a tornado.
When considering the things you own, ask yourself the following.
- Do you have more stuff now than when you originally bought your homeowners policy?
- Do you have different stuff?
- Do you have less stuff?
What you’re trying to figure out is if you need more or less insurance to replace or repair what you own if any of it gets damaged or stolen.
While thinking about your stuff, it’s also a great time to create or update a home inventory. If something bad happens, like a fire or a backed-up sewer, an inventory means you won’t have to remember everything you lost, and it will make the claims process much easier. Inventories can also help you determine if you need to change your coverage level. If you need to create a home inventory, the National Association of Insurance Commissioners (NAIC) offers a free smartphone app, myHOME Scr.APP.book, that takes some of the headache out of the process. There is one for iPhones and another for Android. You can also download a paper version that works as a good start to a more complete inventory.
If you’re updating a home inventory, remember to add anything new, and to provide details on valuable or antique items.
It’s important to remember that life insurance is to help surviving family members after you die. If there have been changes in your life - marriage, birth of a child or grandchild, divorce, death of a spouse, paying off your mortgage, children finishing college - you will want to consider re-assessing your life insurance needs.
Even if you don’t need to make changes, you should review your policy so you are familiar with it. Keep these questions in mind.
- Do premiums or benefits vary from year to year?
- How much do the benefits build up in the policy?
- What part of the premiums or benefits is not guaranteed?
- In what situations and through what procedures can you assess cash values?
- Can the policy be converted into another form of insurance or annuity?
Depending on where you are in life, you may want to ask your company or agent about "conversion privileges" from your current term life insurance policy to a new whole life insurance policy, or you might also be able to expand your death benefits so they can be used while you are still living.
The DOI can help
If you have questions about or problems with your insurance, please contact the Division of Insurance. Our dedicated Consumer Services team helps people untangle the complex world of insurance, as well as investigating formal complaints about insurance companies or insurance agents. Contact the Division at 303-894-7490 / 1-800-930-3745 (outside of the Denver metro area) / DORA_Insurance@state.co.us.
A little work now will help to avoid surprises when you need to use your insurance.
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit dora.colorado.gov/insurance for more information or call 303-894-7499 / toll free 800-930-3745.
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675.