Annual insurance policy review checklist

An annual review of your insurance can help you save money, whether it’s on your premium now, or by making sure you’re covered in case something happens. It’s also key to ensuring your coverage evolves along with any changes in your life.

Major life changes like getting married, divorced or moving to a new neighborhood, city or state require immediate attention to your insurance policies. Your coverage needs often shift dramatically with these types of changes, and failing to update your policies could leave you vulnerable to gaps in protection. However, even small life events, like buying new jewelry or getting a raise, could affect both your premiums and the amount of coverage you need going forward.

Start your insurance review by making a list of all your coverage. Even though you can do this at any point during the year, try to review all your policies at the same time. Some providers offer a discount if you bundle policies through them, such as home and auto.

Here's a checklist of what to look for with different types of insurance.

Life insurance review

Reviewing your life insurance regularly helps ensure that the type you own and the amount of coverage it provides is meeting current and future protection needs for you and your family. This type of insurance is particularly important to monitor. When the policy does come into play, you’ll want the process to be as simple as possible for your beneficiaries.

Situations in which you may want to consider revising your coverage can include:

• Changes in income including a job loss or promotion.
• A birth or death in the family.
• A divorce or marriage.
• Moving to a new neighborhood, city or state.
• Relocating for a new job.
• Changes in health or lifestyle.
• New policy types and benefits become available, such as long-term care insurance.
• The financial strength of your insurance carrier may have changed. Consider looking into what competitors can offer you.
• A changing interest rate environment. If you have a cash value policy, it may not be performing the way you expect if or when interest rates are low.

Life insurance policies are especially personal, so be prepared to provide information such as medical records and your beneficiaries’ Social Security numbers. Make sure to speak with a professional about your coverage needs.

Your life insurance review should include your beneficiary designations. Individuals named as beneficiaries of your policies take precedence over any persons named in a will or trust. It’s important that you review these designations frequently to make sure the proper beneficiaries are named.

Health insurance review

Your health needs may change over time, as well as whether you’re insured through an employer or purchase on your own. Changing state and federal laws can also affect the type of coverage available to you, making a health insurance review even more important.

Here are some things to consider:

• What is the current term on your policy?
• Are your prescriptions covered under your current plan?
• Are you allowed access to your preferred doctor and clinic, or are they considered out-of-network?
• Is your plan eligible for an HSA?
• How much are the premiums, deductibles and out of pocket costs?
• Are you approaching age 65? It’s important to start looking into the complexities of Medicare enrollment and your options.

Depending on your preferences for an HMO or PPO and your healthcare needs, some of your answers to these questions may matter more than others. For example, you may be willing to pay more out of pocket to be able to see the physician you’re most comfortable with.

When it comes to your health insurance review consider what will work best for you and your family’s needs.

Homeowner’s (or renter’s) insurance review

To review your insurance policy, look for the declaration page. If you can’t find it in your documents, ask your provider. The declaration page provides a summary of your current coverage.

From there, you can review what’s covered and determine if you need to adjust. Some of the common reasons for updating coverage include:

• Your property value has changed. If your home has increased in value since you bought it, you'll need to increase your coverage to reflect the new value. Rather than using your home's appraised value, use a per-square-foot replacement cost in your neighborhood as a reference, which you can get from your local Home Builders Association. This will help you more accurately determine the amount of coverage you need.
• You’ve moved to a new location with different property values, building costs, and other risk factors, such as environmental risks or crime rates.
• Home renovations or remodeling can lead to a change in home value that would need to be accounted for in your policy. Even if your home value hasn’t changed, some policies may not cover remodeled areas if they haven’t been documented.
• If you’ve bought jewelry, electronics or other purchases of significant value, it’s a good idea to update your coverage to include those assets.
• Noting the difference between true replacement value coverage and actual cash value and which one you have. Many homeowners are surprised when they discover their insurance will not cover the full cost to replace items in their home after they file a claim.
• Assess whether you may need umbrella insurance to compensate for any limitations in your home insurance policy. Umbrella insurance could protect you from worst-case scenarios such as if someone were seriously injured in your home due to negligence.

Next, check for discounts. For example, you may be able to reduce your premiums if you’ve updated your home security system or if the management team in your apartment building added a new sprinkler system. Or you could bundle your homeowner’s insurance with existing insurance policies for a bigger discount.

It’s a good idea to shop around a bit, too. Don’t just look at your current provider and be sure to consider bundled coverage.

Auto insurance review

How much you pay for auto insurance can vary based on several factors. Some are obvious, like the cost of the car and your driving record. Others are less so: Did you know improving your credit score could lower your premiums on auto insurance?

Other factors that could lead to lower premiums include:

• If you’ve recently updated or changed your health insurance, you may be able to reduce the amount of medical coverage in your insurance policy.
• Bundling your home and auto coverage can help you save, but even if you don’t, it’s worth investigating. Insurance companies often view homeowners as less risky.
• What neighborhood you live in, and where you garage your car, can affect your rates. Your ZIP code affects everything from theft rates to traffic patterns, which directly impact your premiums.
• If you have more drivers than automobiles, consider whether every driver needs to be listed as a primary driver. Switching a covered driver to “occasional” rather than “primary” can help you save.

Frequently asked questions

What is an annual insurance review?

An annual insurance review is a yearly exam of all your insurance policies, such as your life, health, home and auto insurance and any other policies you may have. You can do this on your own or with your insurance agent(s).

A regular review ensures you have the coverage you need, and your beneficiary designations are accurate, if relevant.

What should I look for during an annual insurance review?

There are a few things you may want to check each year:

• Any pricing or premium changes
• Whether your current coverage still fits your needs
• If bundling policies is possible and, if so, provides any cost savings
• Whether you qualify for any discounts, such as paying your premium in full

Can I bundle insurance policies?

Yes, you may be able to bundle insurance policies (when you buy more than one type of insurance from the same provider). However, options will vary by insurer and the types of policies you want to bundle.

The most common bundling option is auto and home insurance, but you may also be able to bundle renters’ insurance, motorcycle, boat, and RV insurance.

Do I need to update my insurance after moving?

Yes, at the very least, you’ll need to update your auto, homeowner or renter’s insurance policies after moving. Different regions and states have varying regulations and risk factors that may impact your coverage needs and premiums. Not updating your policies could result in coverage gaps or overpayment.

Do I need different homeowner's insurance coverage after moving?

Yes, it’s likely you’ll need to update your homeowner's insurance coverage after moving. Whether it’s a new neighborhood, city or state, your new location may have different natural disaster risks, crime rates, building costs, and local regulations that require adjustments to your coverage limits and policy features.

How does moving affect my life insurance policy?

Moving may affect your life insurance policy in several ways. Particularly if you’re moving to another state, different regulations and tax laws could impact your coverage. Also, any changes in cost of living may require adjustments to your coverage amount to maintain the same level of financial protection for your beneficiaries.

Other insurance

It’s important to make sure you’re covered for your health, life, house, and car. But what about other types of insurance?

Ask yourself if the following policies might be right for you:

• Disability insurance
• Long-term care insurance
• Life insurance for children or dependents
• Pet insurance

Make sure to consult with your insurance providers to discuss any changes you want to make or questions you may have about your coverage after reviewing it on your own. A financial professional can also help provide guidance on coverage for your needs.

Insurance plays an important role in your financial plan. Learn how our collaborative financial planning approach can help you see a full view of your financial picture and work toward your financial goals with confidence.