Why You Should Review Your Insurance Policies Every Year

Life is constantly changing – whether it's buying a new car, welcoming a new family member, or even starting a side business. While you're busy keeping up with these changes, it's easy to overlook one crucial task: reviewing your insurance policies.

However, an annual insurance review can be the key to ensuring you're adequately protected and not paying for coverage you don't need. Here's why this simple habit is so important.

1. ADAPT TO LIFE CHANGES

Major life milestones often have a direct impact on your insurance needs. Consider these scenarios:

• Marriage or Divorce: If your relationship status changes, it could affect your auto, home, or health insurance. Married couples might benefit from combining policies, while divorcing individuals may need to separate their coverage.
• Adding to Your Family: A new baby, adoption, or even a dependent parent could require adjustments to your health and life insurance.
• Home Renovations or Purchases: If you've upgraded your kitchen, added a home office, or purchased a new property, your home insurance policy might need a higher coverage limit.
  
  

Skipping an annual review means you could either be underinsured or paying for outdated coverage that no longer fits your life.

2. STAY COMPLIANT WITH CHANGING LAWS AND REGULATIONS

Insurance laws and requirements can shift from year to year. For example:

• Auto Insurance Minimums: States may adjust the required liability limits for drivers, and failing to meet these could result in fines or license suspension.
• Business Insurance Updates: If you run a business, compliance with new industry-specific regulations might demand updates to your liability or workers' compensation policies.
  
  

By revisiting your policies annually, you ensure your coverage meets current legal standards, avoiding unnecessary headaches later.

3. TAKE ADVANTAGE OF DISCOUNTS AND LOWER RATES

Insurance companies frequently update their pricing models and offer new discounts that weren't available when you first signed up. Common opportunities for savings include:

• Safe Driving Discounts: If you've maintained a clean driving record, you may qualify for lower premiums.
• Bundling Policies: Combining auto and home insurance with the same provider can result in significant savings.
• New Technology Discounts: Adding a security system to your home or a telematics device to your car could reduce your rates.
  
  

Without a review, you might miss out on these opportunities to keep more money in your pocket.

4. ACCOUNT FOR INFLATION AND MARKET CONDITIONS

The cost of rebuilding a home or replacing personal property has likely increased since you last updated your policy. Inflation affects everything, including construction materials and labor costs. If your policy doesn't account for these changes, you might face a significant gap between what your insurance pays out and what you need to recover from a loss.

Similarly, the value of items like jewelry, collectibles, or electronics can fluctuate. An annual review ensures these high-value assets are adequately covered under your homeowner's or renter's insurance policy.

5. AVOID SURPRISES DURING CLAIMS

Imagine filing a claim only to discover you're underinsured or not covered for the incident. For example:

• Natural Disasters: Homeowners might assume their standard policy covers floods or earthquakes, but these typically require separate policies.
• Business Liability: If you've expanded your business offerings, your existing policy may not cover the new risks. An annual review allows you to address these gaps before they become costly surprises.
  
  

6. ADJUST DEDUCTIBLES TO FIT YOUR FINANCIAL SITUATION

Your financial situation might look very different today than it did a year ago. If you've built up savings, you might choose a higher deductible to lower your premiums.

On the other hand, if your budget is tighter, opting for a lower deductible could provide peace of mind in case of a claim. Revisiting this detail annually ensures your insurance remains aligned with your financial goals.

7. PREPARE FOR THE UNEXPECTED

The past few years have highlighted just how unpredictable life can be. From global pandemics to extreme weather events, risks are constantly evolving. Reviewing your policies ensures that your coverage keeps pace with emerging challenges and that you're ready for whatever comes your way.

HOW TO CONDUCT AN ANNUAL REVIEW

Now that you know why an annual insurance review is essential, here's how to do it effectively:

• Gather All Policies: Collect your auto, home, life, health, and any additional insurance policies you have.
• Identify Changes: Consider what's changed in your life, from family and career to assets and health.
• Consult Your Agent: Work with an insurance professional who can help identify gaps, suggest adjustments, and uncover potential savings.
• Update Beneficiaries: Ensure the correct individuals are listed on life insurance and other relevant policies.

An annual review doesn't have to be a daunting task. Set a reminder to revisit your policies each year – perhaps around tax season or your policy renewal date. By making this a habit, you'll stay proactive about protecting yourself, your loved ones, and your assets.

Insurance isn't a "set it and forget it" part of your life. Your needs, the market, and available options are always evolving. By reviewing your insurance policies annually, you ensure that you're adequately protected, compliant, and not overspending.

At SimplyIOA, we understand that life moves fast, and keeping up with insurance can feel overwhelming. That's why we're here to help you navigate your options with ease. Ready to review your policies? Contact us today to make sure your coverage is as dynamic as your life.