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3 bills to re-evaluate yearly

By Paula Pant · Bankrate.com
Monday, November 5, 2012
Posted: 7 am ET

Want to save thousands of dollars over time? Spend one day a year re-evaluating your insurance policies.

At that time, examine your homeowners, auto and life insurance policies to make sure you're still getting a great deal relative to your coverage levels.

If that sounds dull, imagine a trip to a Caribbean beach you paid for with money you've shaved off premiums.

Here's what you should look for during your annual insurance checkup:

Homeowners insurance: First, make sure you're adequately covered. Some homeowners make the mistake of covering their house only for the amount they paid. But if you snagged a great deal on your home, you may have bought it for less than the cost to rebuild.

Use a website such as AccuCoverage.com to find the "replacement cost" of your home -- which is the cost of reconstructing your house from scratch at today's prices.

Make sure you have sufficient coverage for your possessions as well. Policies will vary with regard to how much they'll reimburse for damage to your "chattel personal," which is industry-speak for "your stuff." If you own any items of particular value, such as art, antique furniture or jewelry, you may want to buy additional insurance. I once bought insurance to specifically cover a high-performance bicycle.

Auto insurance: Did you finance your car? Many lenders require you to carry comprehensive and collision coverage for the vehicle's purchase price until your loan is fully paid. Once your car is very old and not worth much, consider dropping comprehensive and collision.

Auto insurance companies are introducing new products and services that reward good driving habits. Progressive, for example, rolled out a Snapshot program in which an electronic device in your car offers a personalized insurance rate based on your driving habits. This service didn't exist five years ago -- and it's just one example of how insurance companies are rolling out new technologies that could potentially lower your rate.

Life insurance: Perhaps you bought life insurance for yourself or a loved one five years ago. Back then, both you and your spouse worked, you only had one child and your mortgage balance was $150,000.

But in the intervening years, you (or your spouse) left the workforce, causing the family to rely on one income. You had another child. You also bought a larger house, increasing your mortgage balance to $250,000.

You can see why there would be need to adjust your life insurance accordingly. Among other things, make sure your life insurance adequately covers the cost of hiring people to perform tasks that the deceased previously did.

Paula Pant blogs at AffordAnything.com about creating wealth and living life on your own terms. She's traveled to nearly 30 countries, owns five rental properties and owes her great life to strong money-management principles. Follow Paula on Twitter @AffordAnything.

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23 Comments
alicedagoon
November 06, 2012 at 10:41 am

Ummm.......okay! I dumped cable, that saves me at least $800 a year. what a joke! Nice blog. Should be called "the money blah blah blah"'

melissa
November 06, 2012 at 10:41 am

What in the world does this have to do with reducing bills. I am tired of going to these things from Xfinity web page only to find out they have nothing to do with what advice I was seeking from their headline. They also contain nothing but useless information.

J. Richardson
November 06, 2012 at 9:42 am

The best way to cut bills would be to dump Comcast. What a rip off!!

Dean
November 06, 2012 at 9:41 am

What on earth did the headline have to do with the content?

littlejohn
November 06, 2012 at 9:07 am

Wait a minute. This was an article about REDUCING my bills. But you advise me to buy more homeowner's insurance and more life insurance. I'm pretty sure that will increase my bills.

Rebecca
November 06, 2012 at 8:57 am

The headline for the article did not match the content.

RAL
November 06, 2012 at 8:35 am

Recomending people drop comprehensive and collision is not going to save much and in the end it could the insured more should they have an accident or an auto is damaged by vandals storms or in any way Other than an accident.
The cost of both can be managed by the DEDUCTABLE, COMP is inexpensive a low deductable 100 to 250 is advisable. Comp also covers theft of the auto damaged & windshields. Collision since repairs can cost in the Thousands is also advisable for newer autos or classic /antique models. Saving $$ on Auto insurance can be done by taking defensive driving courses that last 3 years and reduces 10 to15% of the premium..Miles driven a year is another way to reduce the premium if you drive less than 7500 miles a year to work or for pleasure.
People should review thier coverages to make sure they have what they need. Seniors who have older autos usually drop comp & collission as they are on a fixed income. Everyone needs to review and deceide on what they want need and can afford.
Unfortunately senior rates are increased for thier age something I think is Descrimination. I work in the Insurance field for over 20 years. I always tried to work for the clients interest not the companies. Sadly Customer Service is becoming a thing of the past it's all about the $$.

ed
November 06, 2012 at 8:24 am

slow news day ?

Jeffrey Linton
November 06, 2012 at 7:59 am

This article is horrible - poorly written and full of missing information - seems like this bunch of junk was written quickly on the train or the toilet!

Lisa Hanrahan
November 06, 2012 at 7:34 am

The article is supposed to be about how to save $1000 by reevaluating insurance policies. The article, however, is only focused on people who may be underinsured. Sounds like they would not save $1000 but would end up spending an extra $1000 to get the coverage they need.
Very bad article to support the main point of saving money.
Must have pulled the wrong article from the file !