insurance agent lately? OK, that is a bit over the top but the point to be made is that a regular review of your insurance policies is a pretty sensible move. Today has me thinking about P&C insurance (property and casualty) because that is something I’ve personally been wrestling with over the last couple of weeks. In my own case it wasn’t the coverage amounts that needed a review but rather the carrier and their rates. More about that in just a minute.
In the financial planning area we have a big review item called “risk management”. This large planning area deals with the sorts of risks we can share through the insurance mechanism, liability, loss of life, loss of income, property loss (like car accidents and trees falling on the house) healthcare costs and costs for certain types of care in the event of our incapacity. If you are a business owner you have a couple of more things to think about in regards to your business operations, the risk of causing harm through a mistake or through negligence, workers compensation and a few more.
We try to cover the bases for this type of insurance in the course of planning with our clients. We quiz them about the sorts of policies they have and help them review their need for coverage in all the various areas of risk management. We’re real familiar with life, disability, health and Long Term care insurance and have focused on those areas within the scope of our planning engagements. But we’ve often not paid as much attention to P&C insurance as we should. When clients tell us they have reviewed their coverage with their agent we take them at their word, but lately we’ve come to realize that some of our folks were not being well served. They either didn’t have appropriate coverage (often in the liability area) or they were simply paying too much for the coverage they did have.
There isn’t the room in this space for a comprehensive look at all the various insurance types and the ramifications of your decisions in regards to those. But if you haven’t reviewed your coverage in the P&C area (and for most folks this means homes and cars along with some extra or built in liability coverage) now is a great time to do so. Reviewing the coverage amounts is one piece of the puzzle, paying attention to the prices is another.
In my own experience I have had ample levels of coverage for my home and autos and had boosted my liability coverage to an adequate amount. The problem was that I was paying just too much for the coverage I did have. Boy was I surprised when I took the time to obtain some additional quotes! It turns out that I was able to reduce my insurance bill significantly by taking a broader look at the marketplace.
Take the time to review your coverage levels and then get a few more quotes. You just might be surprised.