How Often Should I Update My Insurance Coverage?
Article at a Glance:
What is National Insurance Awareness Day? National Insurance Awareness Day is a nationally recognized holiday you should use as your yearly reminder to review and update your policies with your agent.How often should I update my insurance policy? Personal lines policyholders should plan to make updates annually, whereas commercial lines policyholders should schedule quarterly or bi-yearly meetings with their agents, depending on the size of the business.What kinds of changes should personal lines policyholders update an agent about? Any significant life change can have an impact on your coverage needs, including updates to your housing, cars, drivers, personal property, job, and more.What kinds of changes should commercial lines policyholders update an agent about? Any changes that might impact rates should be reported to an agent, such as an increase/decrease in sales, employee counts, company car use, employees working from home, etc.How do I update my insurance policy? Get in touch with your agent and schedule a time to sit down and discuss your polices in detail. They should be able to guide the conversation and ensure you have addressed any relevant changes.
Many insurance policyholders adopt a “set it and forget it” mindset when it comes to their coverage. They figure that once they’ve done their due diligence to make sure their key assets are insured, they can wait until they need to file a claim before worrying about their policies.
Unfortunately, this practice is ineffective in properly managing your insurance coverage. In fact, many insurance experts recommend reviewing your insurance policies at least once a year, if not more frequently.
“There are so many people who have not reviewed their coverages for a long time,” says Pat Filipkowski, Personal Lines Underwriting Manager at Central Insurance. “And if you haven’t, you should make it a priority to call your agent, review your coverage, and ensure you’re protected against anything that might come up.”
What is National Insurance Awareness Day?
Observed on June 28th each year, National Insurance Awareness Day is a holiday recognized by insurance carriers, agents, and policyholders alike. On this day, these groups take a moment to acknowledge the safety and peace of mind that come with proper insurance from a trusted carrier.
“National Insurance Awareness Day acts as a reminder to review your insurance, and to make sure that everything you have is covered appropriately.”
– Pat Filipkowski, Personal Lines Underwriting Manager at Central Insurance
At Central, we challenge our policyholders to use this annual observance as more than just a passing celebration; we encourage them to use National Insurance Awareness Day as a strategic reminder to check their existing policies and make the necessary updates to reflect any changes within the last year.
Read on to explore how often different policyholders should update their policies, what kinds of changes to report, and how to initiate that conversation with your agent.
How often should I update my insurance policy?
For personal lines customers, a yearly audit of your existing policies is required to ensure you are adequately covered.
This is because “a lot can happen in a year,” Filipkowski says. “You want to make sure you have your policy reviewed regularly and that you and your agent look at everything that’s changed, whether it’s a new car, a new job, a new driver in your household, etc.”
When it comes to commercial lines, smaller businesses should plan to review and update their policies once a year as well, whereas larger companies should consider an even more rigorous review process.
“For larger insured commercial customers or just larger businesses in general, we recommend checking in quarterly or at the very least twice a year with their agent, just to make sure everything is accounted for,” says Ruth Eanes, Commercial Underwriting Manager at Central Insurance.
What kind of changes should personal lines policyholders update an agent about?
Although a yearly audit is recommended for personal lines, Filipkowski emphasizes you should notify your agent whenever you experience a significant life change.
Significant Life Changes to Report
1. Your home. If you purchase a new home, make changes or additions to your existing home, purchase a second property or house or begin renting out a new property, you will want to keep your insurance agent up-to-date. “We’ve seen a lot of people making additions to their homes during the pandemic,” he says, “and that’s something to note with your agent because you want to make sure the value we’ve set for your house is still accurate.”
2. Your cars. Alongside the purchase, lease, or even sale of a vehicle, the most important aspect to note when it comes to your cars is the drivers who will be using them. “If you have a new driver in the house…you have to make sure they’re on your policy so that they’re covered when they’re driving your cars,” Filipkowski says. Similarly, he recommends noting if any elderly drivers are using your vehicles, as they are often more at risk for accidents, and your coverage may need to be updated accordingly.
Keep In Mind: Younger drivers taking Central’s Teen Smart Driving program or older drivers engaging in defensive driving courses can both lower rates when it comes to auto policies. Make sure to update your agent if these changes have occurred, as well.
3. Your job. Keeping your agent up-to-date with any career changes is an essential aspect of your policy reviews, as well. Factors like whether you’re using (or no longer using) a company car, driving a different amount of miles to work, etc. can all impact your rates.
4. Your purchases. “You want to make sure that if you had any large purchases recently or if there’s something you already own that you want to cover, you run that by your agent as well,” Filipkowski says. Insuring an engagement or wedding ring, for instance, is an often overlooked aspect of wedding preparation and yet a crucial one in case of loss or theft.
Other Factors To Keep in Mind
Alongside these changes and life updates, Filipkowski also emphasizes the importance of making sure your current policy will continue to cover any losses you may have.
“Especially with inflation right now, things cost more today than they did a year ago,” he says. “We’ve seen the cost of houses and the cost of replacing houses go up dramatically in the last year, so you need to make sure you update your policy as needed and that you still have enough coverage there in case of an accident.”
Don’t Forget: Personal lines policyholders aren’t the only customers who need to consider the impact of inflation on their insurance. Commercial customers need to stay up-to-date on these trends and speak with their agent about the potential impact on their policies.
The rising costs of bodily injury coverage and medical bills are also vital to keep in mind when determining how much to increase your coverage year over year.
What kind of changes should commercial policyholders update an agent about?
Similar to personal lines customers, commercial policyholders should update their insurance agent if their organization experiences major changes. These might include:
Increased or decreased use of company cars among employees.Work from home trends among employees.Increase or decrease in sales.Increase or decrease in employee count.
Updating your coverage ensures that your employees and assets are safe, and that you are paying only the anticipated amount for your policy. This is because failure to report significant changes like those listed above can result in unexpected charges at the end of the year after a standard audit.
“If a carrier were to go out and see what a company’s sales are and how many employees they have, and they find that they have earned [more than originally reported on their policy], they could be charged an additional premium to cover that additional exposure,” Eanes says. “It’s important that commercial policyholders know they can update their policy as they go, so they can avoid this kind of a bill at the end of a policy period.”
Keep in Mind: Commercial customers should review their policies on schedule to stay on top of exclusions. “It’s important for our policyholders to regularly make sure that they have all the coverage they need and that there are no exclusions on their policy,” Eanes says. “Being aware of those exclusions gives customers time to make sure they’re adequately insured.”
Don’t forget that your insurance agent is a trusted partner when it comes to keeping your business running. They are there to ensure you are protected, even as you experience inevitable changes in your organization, and to inform you about new products and trends that might be most relevant to you.
For example, Eanes explains “one thing insureds need to check on right now is that they have cyber coverage. With the pandemic and everyone working from home, it’s important to make sure everyone is adequately covered in case of a cyber attack.”
This is the type of insight your agent can provide as they work with you to keep your business thriving.
How do I update my insurance policy?
The process of updating your insurance policy is simple. Start by scheduling a phone call or meeting with your independent insurance agent. At Central, we always recommend our customers take the time to sit down with their agent face-to-face whenever possible, as this helps to streamline conversations and build trust between the two parties.
During the scheduled conversation with your agent, bring up any aspects of your personal life or business you want to make sure they are up to date on. Come with a list of questions prepared, or lean on your agent for guidance as to what changes your policies might need depending on these shifts.
Pro Tip: Don’t be afraid to overshare changes in your life that you think might be relevant to your insurance coverage. Our agents would prefer to have all the information when it comes to updating your coverage.
From there, your insurance agent will work their magic and draft up any changes to your policy. As a reminder, the key updates you might receive from this kind of meeting include:
Changes in rates.Additional exclusions on your policies (for commercial customers).Updates to coverage limits (due to global financial trends).And more.
“Only you know what you need covered and what comfort level you have with all of your property, possessions, drivers, cars, and so on,” Filipkowski says. “So bring everything you can think of to the table when you meet with your agent. Because yes, they are there to guide you and ask the right questions, but at the end of the day, the most important thing is that you feel comfortable with the coverages on your policy.”
Celebrate National Insurance Awareness Day by updating your policies today.
Don’t fall for the “set it and forget it” insurance trap. Be sure to check your policies regularly—whether on National Insurance Day or otherwise—and take control of your peace of mind.
“There are many people that haven’t reviewed their coverage since they signed their initial policy because they just don’t know when they should bring it up or how,” Filipikowski says. “If that sounds like you, don’t wait. Call your agent today and make sure you’re protected.”
Already insured with Central? Get in contact with your agent today to start discussing your coverage options. Not yet covered by Central? Explore our extensive coverage options and find an agent in your area today.
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