Your insurance should change along with you.
Imagine this: you arrange insurance for your personal contents, at an amount which will allow you to replace everything should the worst occur. Once the policy is in place, you forget about it because you are now covered and go about your life, happily paying your premiums. Over the next few years, you progress in your career and slowly upgrade things in your home and life: the leather couches you always wanted, a bigger TV for family movie nights, and some renovations here and there. At some point, an unfortunate event such as a fire or flood occurs, and you are faced with replacing all or most of what’s in your home. That’s OK, because you have contents insurance for this very reason!
Unfortunately, however, if your policy has not been reviewed regularly you may be caught short in this type of scenario. Here’s why and how you should keep your personal insurance policies updated at all times.
Why insurance reviews matter
As highlighted in the example above, people and households can quickly “outgrow” their insurance. Contents, car, life, and other policies are often based on a particular sum which will be paid out, and as life moves on this amount can become too small; resulting in underinsurance. Conversely, in the case of vehicles the value noted may become too high as the vehicle depreciates, resulting in over-insurance and more being paid on premiums than needed.
Balancing premiums and Sum Insured values can be tricky. Situations change, whether due to life events or just through the passage of time. Insurance reviews are therefore essential—and with the help of an experienced broker, this can be a relatively simple task.
How to keep on top of it
As almost any adult will know, life administration is constant and tedious. Insurance can definitely fall under this category! Regular reviews will pay off down the track, however, by ensuring you are only paying for the amount of cover you need but will still be fully covered should the worst happen. Here are a few tips for staying organised and ahead of your insurance policies.
- Set an annual reminder in your calendar so that you know when your insurance will be due for renewal or review. Even if nothing specific happens to prompt any changes in cover, it is beneficial to review your policies at least once a year. Some changes to circumstance will creep up on you, such as an increase in the value of your home contents. Catching these requires regular reviews.
- When you make a big purchase, think about reviewing your insurance. Buying a new car makes this a necessity, but something like a renovation to your home should also prompt you to think about your cover.
- Having children, getting married, or getting a divorce are life events that should prompt a review of life insurances and other policies.
- Health insurance can be subject to change too; if you start or stop smoking, for example, your policy might need some attention.
Help from the experts
Just as arranging insurance should not be a “set it and forget it” situation, insurance broking services are not designed to be a one-off experience. Alongside helping clients to find the best policies to fit their needs and advising how much cover they need, weighed up against their unique risk factors, a great broker will also help with regular reviews.
Knowing how to adjust your policies when circumstances change is no simple thing. An insurance broker can guide you through a review, make the necessary adjustments, and suggest additional cover—or even suggest dropping cover when it is no longer necessary. Your interactions with your insurance broker should therefore not be over once your policies are set up. I Instead, it should be a relationship that will see you covered through life’s ups, downs, and lateral movements.
Experienced insurance brokers walk alongside you for all insurance-related matters. If you would like professional help to decide what cover you need, determine which insurance providers work best for you, and keep your insurance up to date and relevant, get in touch with the award-winning Runacres team. We provide broking services to Kiwis across the country, and specialise in an array of both personal and business insurances. We are also experts in risk assessments, and can help you to figure out what you need from your insurance policies both at the initial consult and further down the road.