Spring Cleaning Checklist Item: Annual Insurance Check-Up

This Spring is no different than any other, in the fact that Spring Cleaning will be taking up a good chunk of our time indoors. However, there may be one item missing from your Spring Cleaning Checklist. Have you ever considered that this may be a great time to complete an Annual Insurance Check-Up? The National Association of Insurance Commissioners (NAIC) says that this is "a chance to brush up on what is covered, and to evaluate whether the coverage is still adequate (or too much) for your current situation."

When reviewing your policy, the NAIC suggests that you find the answers to the following questions:

1. What type of coverage do I have?
   Homeowners or Renter's. A homeowners insurance policy covers the structure, belongings and legal obligations if someone is injured at your home. A renter's policy does not insurance the structuer, but otherwise provides similar coverage. To review a list of coverages that are in a typical homeowners or renter's policy, go to www.InsureUonline.org, select the appropriate life situation on the right, then clock on the "Home" tab.
   
   Replacement Values. Check the type of replacement value provided in the policy. Actual cash value (ACV) is the amount it would take to repair damage to a home or to replace its contents after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace a home and its contents with similar quality materials or goods, without deductiong for depreciation.
   
   Liability Limits. Liability insurance protects you from legal obligations arising from accidents involving visiting non-residents. With a few exceptions, such as auto or boating accidents, all-purpose liability coverage follows wherever you go. An umbrella policy can extend the liability limits of a homeowners or renter's policy if the policy limit is insufficient.
   
   Medical Payments. Homeowners and renter's policies typically include limited medical expense payments for injuries occurring on your premises to visiting non-residents. It may also cover medical expenses of another individual injured by you, a member of your family or a family pet while away from the home.
2. How much coverage do I need?
   Make a home inventory. A home inventory is the best way to determine the appropriate level of coverage needed for contents. It is also a useful tool to have in case of a loss. When doing the home inventory, make sure to include as much detail as possible about the items.
   
   Do no over insure. Homeowners do not need to insure the value of the land a home sits on, but coverage should include any outdoor structures on the property. For both homeowners and renters, concentrate on an accurate list of belongings and be sure liability limits are at a proper level.
3. What are my deductibles and discounts?
   Save money on homeowners or renter's insurance. Deductibles and discounts are generally the easiest places to save money on this type of policy. Most companies offer discounts for people who have more than one type of insurance policy with them, and for people who have had few claims or are long-term customers. When it comes to the deductible - which is the amount you have to pay if there is a loss - usually the higher it is, the lower the premium. It's normal to consider raising a deductible to save on premium, but remember, the bill will be that much more following a claim.

Once you have completed your review, the NAIC suggests that you call your agent and ask the following five questions using the information from your review as a starting point:

1. Is the coverage on my home and its contents adequate? Is it too much?
2. Is my premium as low as I can expect it to be? Are there additional discounts available? Can/Should I raise my deductible? What about mitigating against damage from local threats?
3. Are there any losses - like flood or earthquake - I need to worry about that are not covered in my current policy?
4. Would my long-term financial health benefit from an umbrella policy?
5. Has anything changed in my coverage in the last year?

Please be sure to read all notices and information sent from your insurance company throughout the year, this will help you stay on top of your policy information and make it easier to do a policy review when it is needed.

If any of the items mentioned above caused you to question your current coverage, give your Farm Bureau agent a call. He or she will help you answer any questions you might have.