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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
Greg
November 06, 2012 at 2:53 pm

What's up with all these trolls on here?

I think that it is perfectly reasonable advice to look at what it would actually cost to rebuild your house and make your insurance match that coverage. I am very sorry for all the people out there who lost homes due to the hurricane in New York and New Jersey. Just imagine how much worse it would be to be in their situation and discover that you were underinsured for your house?

Seriously, you trolls out there don't make any sense. Did you even read the article?

Wheelo
November 06, 2012 at 2:33 pm

This is one example, of many "filler" blog-glob, that is inserted under a catchy headline! The author is listed as "Paula Pant", sounds more like an adult film star, Chuck and Bonnie are still clicking... where's the meat? Just another cyber twinkie!

Sue
November 06, 2012 at 1:48 pm

I work for the insurance industry and this was NOT written by an insurance company, I guarantee you that. Keep switching companies and see what kind of coverage you have in the end when you have a claim! Talk to your agent, not the internet. They are licensed for a reason!!

Kelly
November 06, 2012 at 1:22 pm

This article talks about saving money but then emphasizes increasing coverages. While it is great to make sure you are adequately covered, the article failed to mention how shopping around every year can save you hundreds of dollars each year on your homeowners and auto insurance. When my homeowner's insurance policy raised my policy by $900 last year, I shopped around and found one that was only $300 more than my previous year's policy. Still not ideal but better than paying $600 more in 2012 for the same coverage! And this year they didn't raise it much at all so I'm staying. I normally shop around for car insurance every year too. The loyalty discount can't even come close to the discount rate of a carrier who wants your business. the trick is to tell them what your coverage amounts and deductibles are, instead of letting them dictate, that way you can compare apples to apples.

BILL
November 06, 2012 at 12:51 pm

I WENT FROM ALLSTATE TO LIBERTY MUTUAL AND SAVED $600.00 A YEAR. MY LIBERTY MUTUAL AGENT CALLED ME 2 YEARS LATER AND TOLD ME I SHOULD TAKE COMPREHENSIVE OFF MY 10 YEAR OLD CAR, BEACAUSE THE BOOK VALUE WAS LESS THE $1500 FOR MY CAR. IT SAVE ME $300 A YEAR.
MY HOME OWNERS INSURANCE DROPPED WHE I CHANGED TOO. ABOUT $400 A YEAR FROM ALLSTATE TO LIBERTY MUTUAL FOR THE EXACT SAME COVERAGE AND DEDUCTABLE, DOLLAR FOR DOLLAR.

Art
November 06, 2012 at 12:46 pm

I think this was written by some insurance company.

Bonnie Turner
November 06, 2012 at 11:57 am

What a waste of time - I agree with others commenting that this does not save much money - it is more likely to cost more money. And I was under the impression by the article title that this would help me save money on my bills - yes insurance is a bill but I thought that this would cover a lot more bills than it does.

The comment on life insurance: this article should have specified what type of life insurance. Whole life insurance is way too expensive for what you get. It's much more feasible to buy term life insurance. And then once your children are grown and out of the house, you can reduce the amount of insurance you're carrying.

LostTime
November 06, 2012 at 11:50 am

I agree with Chuck.

Chuck
November 06, 2012 at 10:55 am

We are all a little bit dumber thanks to this valueless article. However, you should be congratulated for getting a number of people to click on this article so we were exposed to the banner ads on the page. Your advertisers should be proud of you. Good work!

daizy canna
November 06, 2012 at 10:52 am

why ahould you relly think bout increasing your life insurance? One life insurance that worth being increased is if you are under age 40 and its whole life. Who can afford it after that age to increase it? Who is going to spend your money after your gone? Its your money so why increase it? Do you really want to buy more for those who are left behind to spend your hard earned money their way? Really? There comes a point that those who are left behind to pick up the peices and more on and to suppport themselves and be productive as you were. Don't get me wrong that we could but not should leave money behind.