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Kids gone? 20 insurance tips for empty nesters

Kids moving out? Before you start planning a vacation or home remodel, give your insurance agent or financial planner a call. Your insurance might need to be adjusted.

"The biggest mistake people make after the kids leave the house is not making changes to insurance," says Kimberly Lankford, author of "The Insurance Maze" and contributing insurance editor for Kiplinger's Personal Finance magazine. "It's one of the key times to look at insurance."

Insurance tips
When your kids move out, your insurance needs change. Whether it's your auto insurance or your homeowners policy, you might be able to save on premiums.
Save on your insurance
Life, disability and long-term care

As your lifestyle changes, it's smart to re-evaluate your coverage and shop around for the best deals.

"Some companies that give the best rates for families with kids may not offer the best rates for couples with no kids," says Lankford.

Here are tips for saving on insurance.

Auto insurance
It's well-known that children drive up the cost of auto insurance. Adjusting your coverage will make it cheaper.
Tips to save on your insurance
1. Ask for an age discount.
2. Tell your agent you've retired.
3. Adjust your auto coverage.

1. Ask for an age discount.
Combined with a safe driving record, you can get better rates for being an older driver. "As you become a more mature driver, there are more discounts available," says Roger Sevigny, secretary and treasurer for the National Association of Insurance Commissioners and Commissioner of Insurance for the state of New Hampshire. The magic period: between "55 and 70 age range, generally," he says.

2. Tell your agent you've retired (or are doing some telecommuting.)
When you're not racking up commuter miles every day, your rates will likely go down, says Sevigny. The number of miles you're driving can have "an immediate impact" on your rates, he says.

3. Adjust your auto coverage.
If the kids have left for good, take them off the policy. If they are simply away at college, ask about a distant student credit, says Jack Hungelmann, an insurance consultant and author of "Insurance for Dummies." Usually, it applies if your child is a full-time student, has gone at least a certain distance to college and hasn't taken one of the family cars to campus. And it can give you a nice break on the premiums.

Homeowners insurance
A lot of things change as you get older and your household shrinks. Here are some ways to take advantage of that.
Tips to save on your insurance
4. Cover those valuables.
5. Do your due diligence.
6. Consider an umbrella policy.
7. Don't automatically insure your kid's dorm.
8. Make a smart move.

4. Cover those valuables.
If you're planning to travel, it's good to check your homeowners policy.

Obviously, you want replacement value for anything lost or stolen. You also want to make sure that the policy doesn't limit your losses in specific pricey-item categories, like jewelry, antiques, furs or collectibles. If it does, a special policy, called a "floater" or "rider," can cover the value of individual items.

5. Do your due diligence.
Insurance often pays off unless there is some basic chore that you neglected (like making sure the furnace is serviced or that the pipes don't freeze.) What does your policy require? "Folks should be aware," says Sevigny. "Ask your agent."

6. Consider an umbrella policy.
"As you grow older, typically, your assets will grow," says Sevigny. As a result, you have more to lose in a liability claim.

One solution: an umbrella policy, which adds extra liability coverage. Policies are sold with coverage of "typically $1 million to $5 million," Sevigny says. The price: Annual premiums can be in the hundreds, depending on where you live, your assets and exposure, and how much you purchase.

7. Don't automatically buy insurance for your kid's dorm room.
Even if your student lives in an off-campus apartment, rather than a dorm, belongings may still be covered under your existing homeowners policy, says Hungelmann. Check with your agent.

-- Posted: Nov. 1, 2006
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