Continuing last month’s discussion on the top 10 Life Changing Events, here are the next 5 events that should cause you to reevaluate/reassess your insurance policies. Just a recap, here are the events we previously covered:
- Moving/buy a new home
- New car
- New driver
- Starting a family
- Kids leave home
So, let’s dive into some additional life-altering events that can affect your insurance.
- Remodeling or Updating Your Home:There’s a clause in your homeowner’s policy that says anytime you change the value of your home by more than 10% you need to call and let your insurance company know. Because your insurance may not cover that new addition you put on or the basement that you decided to remodel that wasn’t there before. We want to make sure that the home is covered properly, so we update the replacement cost. But then you may have decided to put a brand new roof on. Well, most companies will now rate based on how old the roof is and give better rates for roofs that are newer. Or maybe you upgraded from that old vinyl siding to the hardy plank cement board siding. Those type of things are the conversations that we should have to not only make sure you’re covered but make sure you’re getting the appropriate discounts related to the changes and improvements you’ve made to your home.
- Marriage or Divorce: When you get married, we obviously need to make sure we add your now husband or wife under the new policy in addition to any engagement or wedding rings that might need to be scheduled specifically. If we’re adding drivers on the policy, obviously, it should encompass those things.
And then the other side of that is divorce. Unfortunately, it happens and it’s something that as insurance agents, we’re going through and looking at it. We can’t just simply make a change based on somebody saying “Hey take my husband off because we’re divorced now.” We need to have communication with all parties and make sure that everybody is protected the way the insurance policy intends. If you know a divorce will be finalized this year, make sure all of your ducks are in a row, and be confident that somebody is not changing the policy without your knowledge.
- Starting a Home Business: Starting a home business can change the liability and exposure significantly on your homeowner’s policy. Let’s say for example’s sake, you’re a Tupperware consultant. The property you have on your homeowner’s policy may not cover that inventory you’re selling for Tupperware or maybe only covers it for a percentage. Well, there’s an endorsement that we can add on to a policy saying “Hey, we’ve got a lot of business property here that we need to cover.” There’s also the exposure to liability, especially if your business involves anybody being in your home to conduct business.
If one of those people tripped and fell down the stairs, or was injured somehow, that’s a business liability exposure. If it wasn’t endorsed onto the policy, a normal homeowner’s policy isn’t going to cover that. Home-based businesses are a very popular, easy way to earn a little extra income and freedom. But you do need to update your homeowner’s policy.
- Retirement/Medicare: Retirement has its own set of rules where people are moving away and downsizing, maybe moving from a home into a condo or into an apartment etc. Or, maybe you’re dealing with a parent that is having to downsize to relocate to an assisted living facility. It is important to know that there are certain things that can be reduced on your homeowner’s policy in such an instance, such as reduced usage on a vehicle because they’re not driving to work anymore. Those are things that people need to consider when they’re looking at or have somebody going through it themselves.
With Medicare, obviously once people become eligible, it’s very complex and not something that a lot of people enjoy going through or trying to understand. Well, good news for you…we’ve got agents in the office that are really good at it. And not only that, they like dealing with it.
- Purchasing a Toy (boat, atv, snowmobile, classic car, etc…): Maybe 2019 is finally the year that you decide to go out and buy that classic Mustang, or Harley, or boat, or whatever toy you’ve been eyeing. Well, big ticket items like that generally have their own special policy. And you should make sure that you insure each item properly. There are certain companies that focus on covering these big ticket items and they typically have better coverage and better rates than your standard insurance company, significantly better coverage. The same thing with boats, they can get really expensive really fast and if you might not want to go with the average coverage that many companies ‘throw in’. If the boat is significantly damaged, they might not be willing to pay for the replacement cost of your boat, just the diminished value of your boat. Also, if you took out a loan on that boat it gets stolen, they may only pay back the depreciated amount which could be far less than your remaining loan balance.
I hope part two of this blog helped answer any remaining questions regarding insurance and when to reevaluate, reassess, and redirect to best benefit you. If you still have any questions, send me an email at TOM@G2ins.com.
Tom Gaumond here, with G2 Insurance, your friend in insurance.