This year has been busy, hasn’t it? So busy, you are probably behind on recording your expenses, budgeting and making sense of all those financial statements your banks and insurance companies send you. However, if you could devote a few hours over the holidays to re-evaluate your insurance portfolio, this could save you a lot of money and headache in the future.
To Get Started:
- Make a list of all the policies you (or your family) hold
- Make a bullet list of the key coverage
- Write down monthly or annual premiums for each
- Pull up the record of all the claims over the past year
- Note whether you met the deductibles on any of the policies
- Mark the expiration dates whenever applicable
With all this information in front of you, look at each policy to identify the two types: the ones you don’t need at all and the ones you can downsize.
Insurance You Don’t Need
When you have multiple insurance policies (and many family members), things get complicated. It’s easy to forget to cancel a policy or overlook unnecessary expenses, especially if you run a home-based business and your financial records are one big blur. When re-evaluating your policies, keep an eye out for these things:
- policies that cover items or persons you no longer own or have responsibility for
- policies covering risks you, your property or family members are no longer concerned about
- duplicate policies from different sources (is your new job paying your disability insurance?)
- overlapping coverage on different policies
- inefficient policies
Let’s say you’ve been paying $50 a month for a sickness protection plan that will pay you $100 a day up to a week in case a major surgery or other sickness puts you on bed rest. That’s $600 a year for $700 worth of coverage, and if you’ve been paying it for several years, you could have saved up all this money by now. In certain cases, a savings account with a good interest rate will protect you better than an insurance policy. But don’t rush to cancel a policy you didn’t use. For example, disability insurance is something you hope you’ll never have to claim, but it’s good to have that peace of mind if a misfortune happens.
Insurance With Excessive Coverage
When you purchase an insurance policy, you pay for a certain amount of coverage. As the time goes by, you might realize that some of this coverage you don’t really need and will likely never use. If you would like to cut down your expenses, you can shop around for a different policy that covers only the things you need. One of the policies you might be able to trim is your auto insurance. Here are some features you might consider downgrading:
- personal injury protection (it mostly overlaps with your health insurance)
- auto collision insurance on an older paid off vehicle
- emergency assistance may already be covered under your AAA membership or through an OnStar feature in your car.
Have you identified a few ways to save money in 2015? Or maybe you need help looking at your big insurance portfolio and making sense of the data? Talk to one of our Carroll County insurance agents at Freedom Insurance and we’ll be happy to help you get the most out of your policies.