The Importance of Insurance Ratings

Most people contact their insurance broker or insurer when there is a major life event that requires new or revised risk coverage — perhaps when they’re buying a new home or it’s time to trade in the old car. However, far fewer people remember to review their insurance regularly or when more subtle changes to their coverage requirements occur.

By regularly reviewing your insurance, you can ensure that your coverage is what you expect in the unfortunate circumstance of having to make a claim. It also helps you make informed decisions regarding coverage and be proactive in minimizing your insurance costs.

There are many different circumstances that can potentially change your coverage requirements and require you to call an insurance professional for an assessment. The examples below indicate some of the instances where you may want to review your coverage:

  • renovations – If you’re doing home renovations, chances are you’ll increase its value as well. Whether it’s a new kitchen, bathroom, pool, or even expensive landscaping, don’t forget to check your policy limits to make sure they remain adequate in the event of an insured loss. If you’ve recently renovated your basement, keep in mind that it’s very likely that your water damage insurance policy will need a review.
  • You have accumulated possessions – Have you done a home inventory recently? Most people have more personal belongings than they think. Estimating the total value of your content is essential to ensure that your limits are adequate.
  • You have purchased a valuable item – Keep in mind that some of your personal belongings need to be scheduled to be properly covered. Jewelry, antiques, collectibles, wine collections, and art are some examples of pieces that may require extra coverage.
  • New coverages have become available – The insurance industry often adapts to changing market conditions and provides coverage in areas it has not had in the past. For homeowners, insurance for water damage and home repair problems (such as broken ovens) has recently become available from some insurers, in some areas. In addition, there are legal, travel, and pet insurance policies available from brokers willing to cover more of your risk and insurance needs.
  • Laws change to give you more or less choice – Changes in car accident compensation means you need to reconsider your choices.
  • You are eligible for additional discounts – Changes in your personal circumstances may affect your entitlement to policy discounts. For example, if you install an alarm system, you likely qualify for a discount on your homeowners policy. If you use winter tires on your vehicle, many insurers offer a discount on your car insurance. If you reach the age of 50-55, you may qualify for discounts for older drivers.
  • If you change jobs and have a shorter commute – You should report this to your insurance broker, as driving less typically correlates with lower risk and cheaper premiums. If you practice a particular profession, you may also qualify for lower insurance rates.
  • You have started a home business – Any other use of your home, other than strictly residential, may require business insurance to properly cover liability risks.
  • Your personal circumstances change – If you are getting married or having children, you may want to review your coverage to make sure your coverage levels are adequate to care for your dependents in the event of an accident.
  • Your child gets a driver’s license – Always check whether your child can be added to your policy. It is often the cheapest option to insure them to drive. If they get their own car, you will probably also qualify for a multi-car discount.
  • If your child is moving to attend college or university – Check if your homeowners coverage can be extended to protect your child’s belongings while you are in school. It can be more cost effective than buying standalone renters insurance.
  • If you haven’t had an insurance assessment in over a year – Your coverage levels may be outdated. An important example of this is your home contents insurance. Property values ​​and replacement costs can easily become so high that your existing coverage limits do not allow the total reconstruction of your home in the event of a total loss.
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Taking the time to talk to your insurance professional is always money well spent. Even if you don’t save on your insurance costs after the call, there’s no substitute for the coverage you expect when a claim becomes necessary. Since most insurance policies have a one-year term, it’s a good idea to consult your insurance professional before renewing your annual coverage.