Life happens, and at different stages you’re going to need different protections from your insurance.
That’s why an insurance checkup is often in order.
Doing it annually may seem like a waste of time, but it could yield some big savings, reports the Investopedia.
That’s particularly true if you have too much insurance. Even being underinsured can cost you if the unthinkable happens.
But making sure you have the right level of insurance is not the only reason a checkup is important.
From taking advantage of reduced rates to ensuring you are getting all the discounts owed, here's a look at five reasons shopping around for your insurance can save you money.
TO TAKE ADVANTAGE OF RATE CHANGES
One of the most important reasons why you want to do an insurance checkup is to save money.
Rates can change more often than you think, driven by a variety of reasons, some of which are out of the control of the insured.
Take homeowner's insurance for one example.
If crime in your neighborhood decreases, so will your homeowner's insurance premium.
Shopping around is the only way you will know if lower rates are available.
YOUR CIRCUMSTANCES HAVE IMPROVED
The timing of your insurance purchase can also have an impact on your rates and is another reason why you want to shop around fairly often.
Take homeowner’s insurance again as an example.
If you bought the policy after a rash of crimes or a big storm and things improved, your premiums could be cheaper.
With auto insurance, the same thinking applies.
You may have signed up for your policy when your credit score had taken a hit, but now you’re in a better financial position and your debts are paid off and your credit score has improved.
Or it may be that you had points on your driver’s license that are now gone.
In both instances, by shopping around you are going to save money, and in some cases, a lot of it.
YOUR INSURED ITEMS GOT AN UPGRADE
Whether you own a home, car or fine art, what you pay for insurance will be based on the perceived risk.
The more that risk is mitigated, the less you will pay in insurance. Take health insurance for an example.
Someone who is healthy will pay less for insurance than someone who is sickly.
But if that sick person got better, then his insurance should be reduced.
The same can be said for an automobile or home.
If you just bought a security system for your home or automobile that is going to lower your risk and thus your premiums.
But if you don’t shop around or at the very least let the insurance know about the upgrades, you won’t be able to save.
YOU HAVE TOO MUCH COVERAGE
Whether it is on purpose or by mistake, often people end up with too much insurance coverage whether that’s for their health, home, automobile or life. Insurance is supposed to give you some peace of mind, but that doesnot mean you have to overpay for it.
While you may not have to check up on your insurance every year to make sure you have the proper coverage, it is something you should want to do more often than not.
After all, you don’t want to have full coverage on your automobile if it's more than 10 years old or $1 million coverage on a $50,000 condo.
On the flip side, being underinsured can also be a costly mistake.
The last thing you want to happen is have a major disaster and not have enough insurance to cover the repairs.
If we're talking about health insurance, not having enough of it could end up bankrupting you.
YOU’RE MISSING OUT ON DISCOUNTS
Insurance companies are in a cutthroat industry, and they want your business and will go to great lengths to attract and retain you as a customer.
Translation: discounts abound. Whether you are shopping for homeowner's insurance, health insurance or for car insurance, insurers are going to offer you discounts that can range from single-digit to double-digit percentage savings.
There are discounts for your age, risk, how many products you have with the company, whether you are a member of a particular group and so on.
If you don’t shop around for your policies, you could be leaving money on the table in discounts and deals.
THE BOTTOM LINE
Insurance is a necessary evil that is needed to give you peace of mind.
And although that peace of mind comes at a cost, it doesn’t have to be too much of a cost if you shop around for your insurance.
Whether it's homeowner's, automobile, health or life insurance, going over your coverage, discounts and rates annually can results in big savings.
Not to mention that it can ensure you have the right coverage for your individual needs.
Doing nothing isn’t an option unless you want to miss out on potentially big savings.
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