BY: ANDREW STEWART
Many Canadians begin the new year with a resolution of some sort or a goal they want to reach, such as getting in better shape, getting out of debt, travelling more, learning a new skill, the list is endless. While some of these resolutions are kept and some are not kept, there is one that can help you find peace of mind: make January the time to review and update your insurance policies.
Insurance should never be a one-and-done type thing, Too many people just buy it and forget about it. But this is a good time of year to take your policies off the shelf and look at what you’ve got. The policy that you bought ten years ago may not fit your current situation anymore. The new year is a good time to ask a very simple but profound question: What are the worst kinds of things that could happen to my home, my vehicle, my health, or my life? and how would it affect me and my family? Then you work backwards from that and say, ‘Okay, if X, Y, or Z were to happen, how would I want my insurance to respond?’ That’s how you start to decide if you have the right kind of insurance as well as the right amount of insurance for the new year.’
As 2018 begins, here are some tips on how you should consider your home, auto and life insurance policies.
Fine-tune your auto insurance policy.
Now is a good time to compare the car’s value to what you pay for auto insurance and determine if your policy still fits your needs. For example, if you are driving an older car, reassess your collision and comprehensive coverage. Set the right deductible, a higher deductible reduces your premium because you pay more out of pocket if you have a claim. Hiking your deductible from $500 to $1000 can cut your premium on collision coverage. Many insurers offer a disappearing deductible based upon how many years without an accident. Just make sure you can afford to pay that cost if your luck runs out. Take advantage of discounts. Car insurers may offer a whole range of modest but worthwhile discounts that are essentially based on a low-risk lifestyle. Insurers also offer fairly hefty auto discounts if you also buy your homeowners or renters policy from them. Manage teenage-driver risk. Adding a teenager to your policy can hike your costs by 50% to 100%. Make sure your child takes a safe-driving course before getting a license. Make it a rule that unsafe driving will mean the loss of driving privileges. Report new kilometres driven. A major cost component in auto insurance is kilometres driven per year. The average is about 25,000. But if you’re driving a lot less than usual for some reason, like a job change or retirement, let your insurer know.
Homeowners Insurance Tips
Update your inventory of your personal possessions. Most people don’t take the time to inventory their personal possessions and don’t have enough personal property insurance. When disaster strikes and you need to make a homeowners insurance claim, you’ll need to know what you own and what it’s worth. Having a video inventory of your belongings could help you recover the true worth of your belongings. If you can’t live in your home, where will you stay? When reviewing your homeowner’s policy, make sure it includes loss of use coverage (also known as additional living expenses coverage), which will be indispensable if you have to relocate for any period of time while your house is being rebuilt or repaired.
Make sure your life insurance grows with you
Many Canadians forget to update their insurance coverage as their needs change. If you have a life insurance policy, you should review it annually with your advisor. As major life events occur, you may find your insurance needs change. For example, you may need to update your coverage as you have children, get married, or increase your personal wealth. Your annual policy review should assess the benefit amount, term, loans and cash value. If you’re finally ready to buy life insurance for the new year, it’s important to consider two things. In today’s economic climate life insurance should typically provide protection all the way into someone’s late 60’s or early 70’s. Secondly, I would caution against shopping only for the lowest price tag.