Prepare for the Coming Year with an Insurance Checkup
As this year comes to a close and the new year approaches, it’s a good idea to thoroughly review your insurance policies. You may want to consider a variety of factors, from the ages of your vehicles to any upgrades you plan to make to your home. In doing this, you can determine what sorts of changes you might need to make to your insurance coverages.
Home Upgrade. Remodeling your kitchen or bathroom, adding an extra room, or upgrading other features in your home may add substantial value to your house. Before the work begins, check to see if you need to increase your insurance coverage. By doing so, the addition or upgrade will be covered in case it’s damaged or destroyed during construction. Also, be sure to notify your agent if you’ve installed a new roof or upgraded your electrical or plumbing system. You may get a reduction in your homeowners premium because these improvements can reduce the risk of damage to your home.
Home Inventory. If you don’t have one already, it’s time to create a home inventory. A home inventory is a list of all of the things that you own, with a description of each item; where you bought it; how much it cost; and the make, model and serial number for major items. You can also document your items by taking photos or videos. If you have receipts, attach those or save on a flash drive, and store in a safe place, like the safe deposit box at your bank. That way, you can access the inventory if the copy at your home is somehow lost or badly damaged.
Home Value. It may be time to re-estimate what it would cost to rebuild your home. The estimate should cover construction costs, but not include the price of the land. To determine the ballpark amount, first contact a local building association or real estate agent and ask them for the current construction cost per square foot for homes in your community. Take that number and multiply it times the number of square feet in your home. That figure will give you an idea of whether you have sufficient coverage to rebuild your home at the current cost of construction, if it is destroyed.
Liability. Check the liability coverage on your homeowners or renters policy to make sure it is adequate, especially if you’ve added such things as a swimming pool or a hot tub, or now have a trampoline in your yard or basement. This may also be the time to consider taking out a personal umbrella policy for additional liability coverage.
New Valuables. If you’ve acquired new valuables, such as jewelry or expensive pieces of art, check your policy. It could have a limit on the amount that will be covered for these types of items, and you may need to add optional coverages to cover the value of any additional acquisitions.
Coverage by Multiple Companies. If you purchase auto insurance from one company and life insurance, homeowners, or renters insurance from another, you may want to consolidate and buy multiple policies from the same company to take advantage of a multi-policy discount.
Auto Coverage. Re-evaluate your auto insurance coverage if you have an aging auto. Check your car’s Kelley Blue Book value to determine what your car is worth, and decide whether the premium you’re paying for collision coverage makes sense, based on what you would receive if your car were totaled. Also, figure out if you plan on driving your car more or less during the coming year. If you have changed jobs, retired, or intend to go on more long distance road trips, you may need to change your policy to reflect the number of miles you intend to drive.
Students in College. If your child will be taking off to college with a car that’s covered by your auto insurance policy, be sure to inform your agent as soon as possible. The cost of the premium may change. You may also want to see if they need a separate renter’s policy, or if they can still be included in the parents’ homeowner’s policy.
New Drivers. If you are a AAA Insurance policyholder with a teen driver in your household, consider enrolling your 18 or younger teenager in the teenSMART home study program. This program, once completed, may result in up to 20 percent savings on most auto coverage when your teen gets their license. You may also qualify for a Good Student discount if your child has less than nine years of driving experience, is a full or part-time student that is not married, and has a certain grade point average.
To find out more about home or auto insurance, contact your AAA Insurance Agent at 1-800-222-1469, visit AAA.com/Insurance, or stop by your local AAA office.
