By Mark Goldwich
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We regularly go to the doctor to get a health checkup. We don’t always like it, but we do it. We takeour car to the mechanic regularly for a checkup (or tune up). We even have our air conditioners checked regularly. We may dread having to do all of these things, but we do them for one good reason. If something is important, it is important monitor it regularly, in order to make sure it is well maintained and functioning properly. To neglect this is to court by having the machine break down.
Your insurance policies are no different. These policies cover some of your most valuable assets, like your home, business, car, your worldly possessions, even your life and health. It is for this reason that you should take the time for yearly insurance checkups to review your policies (preferably with a knowledgeable insurance agent). Many insurance companies themselves realize the importance of this, and will contact you to schedule the checkup. But if they don’t, you should take the initiative to schedule this preventative maintenance yourself.
What should you look for in your policies in preparation for the checkup?
Most every insurance policy has a “Declarations Page” or similar overview of your policy coverage, limits, deductibles, the policy period, your contact information, and your agent’s information. Use this form as the basis of your review and checkup. Make sure the information on the policy is current and accurate. I would recommend you use the expiration date of the policy period and schedule the checkup with your agent about 60 days before that. Think about the policy limits – are they too high, too low, or just right? Have there been any significant changes to the property being covered? Did the mortgage company change? Did one or more named insured change? Did you add or lose property? Is the deductible manageable? You want the deductible just high enough to manage, because the higher the deductible, the lower your premium, and you don’t want a deductible so low that you would be tempted to file smaller claims.
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Then consider the coverage and exclusions of your policy, to the best you can understand them. Makenotes of any questions that you have, so you can ask your agent when you meet. What about special endorsements or exclusions? Are there some you have that you don’t need, or no longer need? Are there some you would like but don’t have? This is the difficult part, because unless you know what is available, you probably will not figure out what you are missing. Again, make notes so the meeting with your agent will be as productive as possible.
I know it is difficult to read and understand your insurance policies. It is tedious even for me, a trained public insurance adjuster. While you do not need to understand every word, the more of it you know, the less scary it will seem, and the better equipped you will be when it comes to seeing what changes you might want to make. This step also makes the checkup easier for you and your agent. It is like all those other items we mentioned earlier; the better you take care of yourself all year, the better your physical will go; and the better you maintain your car or air conditioner, the better they will run with fewer problems or breakdowns.
Do You Have a Clean Bill of Health?
The goal here is twofold: 1) Understand your policies more clearly, and 2) Ensure you have the right policies, limits, endorsements, and deductible for your particular purposes. One this is certain, the time to find out about these things is not after something happens and you need the insurance, because then it is too late to make the needed changes. I can’t tell you how many times I have seen people dealing with insurance nightmares that never would have happened if they just took the time to make a few corrections to their policies. Sometimes it is something as simple as making sure the names are correct. People get divorced, marry, or pass away. They change mortgage companies from time to time. When these things happen, the policies need to be updated with the most current information.
And remember, as an insurance professional, your agent should be a big help to you in understandingwhat the policies do and do not cover. Sure, it is their job to “sell”, but only a truly unscrupulous agent would try to sell you more than you need, and in my experience, most are too worried about the negative repercussions of selling you unneeded insurance to do this. Don’t get so caught up in saving a few dollars that you give up coverage that could really come in handy should disaster strike.
So before the year gets too far underway, get out your insurance policies and your calendar. Plan out a day when you can review your policies, make your notes, and meet with your agent. Just like your health checkup, it won’t be something you look forward to, but once it is done, you’ll be glad you did it.
Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.