“The only constant in life is change.” This quote — attributed to the ancient Greek philosopher Heraclitus — certainly applies today when it comes to insurance coverage.
Throughout life, you will experience changes that prompt you to reevaluate whether you have the right insurance coverage. Maybe you’ll get married, build a house or buy a car.
According to the advocacy group Consumer Action, significant life changes may increase or decrease your risk and need for insurance protection.
Consult this checklist at least once a year, and give yourself an insurance checkup.
To assess your auto coverage, consider:
- Have you sold your car?
- Have you bought a new car?
- Do you have a new driver in the family?
- Has your adult child moved out of the house, leaving you with one less driver?
- Has your potential liability increased? (Maybe you drive a carpool or work for Uber.)
- Has the number of miles you drive each year increased or decreased significantly?
- Do you have an old car that is not worth repairing if damaged in an accident? (If so, the Insurance Information Institute says you might consider dropping collision or comprehensive coverage.)
- Have your assets increased? (You might have more to protect.)
Homeowners or renters insurance
When evaluating your homeowners or renters insurance, take these issues into account:
- Have you married or divorced?
- Have adult children moved in or out of your home?
- Have you remodeled or added to your home?
- Have you added security alarms or a sprinkler system?
- Have you upgraded your heating, plumbing or electric?
- Have you added a swimming pool, hot tub, trampoline, tool shed or gazebo?
- Have you acquired a dog? Or, do you no longer have one? (According to Consumer Action, dog bites are a top reason for homeowners insurance liability claims.)
- Do you have more — or less — jewelry or electronics?
- Do you rent your home? Do you operate an Airbnb?
- Have you started a home-based business?
- Are you at risk for flooding? (Standard home insurance policies do not cover flooding. You can buy flood insurance through an agent or the National Flood Insurance Program.)
Personal liability umbrella policy
If you are ever involved in a lawsuit, your financial assets could be depleted quickly, even if you are not at fault.
According to the Insurance Information Institute, a personal liability umbrella policy offers additional protection after you’ve reached the limit on the underlying liability coverage stated in your homeowners or auto policy.
Consider adding a personal liability umbrella to cover situations like the following:
- A court orders you to pay for injuries or property damage caused by you or your family members.
- Your teen driver is found negligent, and the amount you are required to pay exceeds your insurance limits.
- Your pet causes damage or injury.
- You are found guilty of libel or slander.
When evaluating your life insurance needs — and whether to increase or decrease your death benefits — consider:
- Do you have loved ones who are dependent on your income?
- Is your current life insurance policy sufficient to replace your earnings after you die?
- Do you have sufficient savings and retirement benefits to support your dependents?
- Do you have sufficient savings or insurance coverage to cover funeral expenses, debts and estate taxes?
- Have you recently married, had a new baby or adopted a child?
- Has your spouse or partner recently died?
- Are your adult children now living on their own and no longer dependent on your financial support?
- Would you like to leave a donation to a particular charity or cause?
Due to the high cost of health care, health insurance is important. When you assess your health insurance, consider:
- Do you and your family currently have health insurance?
- Do you have health insurance through your employer?
- Would you like to switch plans during open enrollment?
- Have you lost health coverage due to unemployment?
- Do you qualify for coverage under the Affordable Care Act?
- Does your adult child now have separate coverage?
- Are you age 26 and no longer on your parents’ health insurance plan?
- Have you recently married or divorced?
- Do you have a new baby or adopted child?
- Are you now on Medicare?
Long-term care insurance
Consider long-term care insurance in these situations:
- Will you need care in a nursing home or assisted living facility?
- Do you have sufficient savings to cover the costs of long-term care for chronic illness or disability?
- Will you need to pay for caregivers in your home to assist you with bathing, dressing, eating and other activities of daily living?
- Do you need to protect your retirement savings from the expense of long-term care?
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.
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