How Often Should You Review Your Auto Insurance Policy?
Quick, name an important big-ticket personal possession you’ve bought within the past few years and have rarely (if ever) even glanced at. No, it’s not your phone, a computer, a pricey item of jewelry, or artwork hanging on a wall.
It’s your auto insurance policy.
Okay, it’s not nearly as sexy as a cutting-edge laptop or a jade and gold necklace, but it could be just as valuable. Your auto insurance policy can be the difference between getting a check to replace a totaled family car or paying tens of thousands of dollars out of your own pocket to get back behind the wheel.
How often should you review your auto insurance, and what does an auto insurance policy review entail? Read on.
Why You Need to Regularly Conduct an Auto Insurance Policy Review
It can be tempting to get car insurance because your state demands it, and then stash your policy away (somewhere) and immediately forget about it. That’s exactly what a lot of policyholders do. Until they need to file a claim, just to find that their policy doesn’t cover that particular event, or your deductible is so high and your coverage limits so low that insurance only partly addresses your pocketbook challenges. That’s why you need to know what your coverage actually covers.
In addition, your life changes. So you need to see if your policy should be upgraded or otherwise altered to reflect your new and ever-changing realities.
For example, you might have purchased liability-only coverage when you bought your car because you could only afford this minimal form of coverage. But liability only covers your own financial responsibilities to third parties if your at-fault accident results in injuries or property damage to others. What liability does not cover is damage to your own vehicle. If your car sustains thousands of dollars in damage, you’re on foot because you can’t afford such a hefty charge out of your own pocket.
But now it’s three years after you bought that minimal coverage policy, and you have a new and higher-paying job. Now you can comfortably afford to lower your financial risk with a full coverage plan.
That’s how your auto insurance policy review works. It helps you rethink your coverage when life events change (for better or worse). Then you and your agent can discuss the different types of auto insurance coverage and find what works best for you.
When to Review Your Car Insurance Policy
How often should you update your car insurance? When things change. That’s when you conduct a policy review. Or better yet, before the change.
When you get that new and better-paying job. Or, conversely, when you get laid off and have to cut personal expenses to the bone. When you get married and will share a car with your spouse. Or the kids are getting to be of driving age. Maybe you review your policy when you move to another community, one with a higher or lower risk of getting your ride stolen or vandalized.
Or when you get a new car. Before telling your insurance agent that you want the same policy you’ve always had, actually read that policy and see if you should make some much-needed auto insurance adjustments.
In fact, you should read your policy at least annually, even if no big changes are underway or on the horizon. It’s being proactive to keep your policy close at hand and carefully reviewed. Life changes. Sometimes slowly, over time, sometimes all at once. If you have a pretty good idea of what you have in coverage, you’ll be ready to place a call to your agent before you find your policy isn’t keeping up with the changes in your life.
Key Factors to Consider When Reviewing Your Auto Insurance Policy
Here are a few more incidents that should trigger the idea of conducting an auto insurance coverage review.
Changes in Your Vehicle’s Value and Coverage Needs
When your vehicle is shiny and new (and probably expensive), it’s important to get full coverage. That includes collision and comprehensive benefits, as well as liability. Your car is a valuable object, and you’ll want your coverage level to reflect that.
But then time goes by. Your formerly new vehicle has now racked up some serious mileage. It’s a bit dented from road life, and its value has dropped considerably. You might consider raising your deductible and asking your agent about other life changes that might reduce what you pay in premiums for a car you could more easily walk away from if it were totaled.
Adjusting Coverage Based on Your Driving Habits
When you got your car, you worked remotely, frequently took public transportation, and could walk to most of the places you needed to be. You were putting maybe 5,000 miles a year on your odometer.
Then you and the family moved to the ‘burbs. And you took a job where you had to show up at the office. That’s a two-hour daily commute. Now you put roughly the same mileage onto your vehicle every week that you used to do in a month.
Statistically, your odds of having an accident have increased. If you have liability-only or have skimped on other benefits because you figured you’d never need more extensive coverage, maybe your life situation has changed that reality. Chat with your agent.
Reviewing Your Deductible and Premium Balance
Your deductible is the dollar amount that you agree to assume before your insurer pays the rest of a claim. So if your vehicle sustains $2,5000 in damages and you have a $1,000 deductible, your insurer will pay the remaining $1,500 in covered claims after you’ve paid the deductible.
Having a high deductible is a smart strategy – until it isn’t. That is, the higher your deductible, the lower your premiums. That’s because your insurer will be financially responsible for less of the repair bill if you’re assuming a greater proportion.
In the above scenario, where the car owner works remotely, takes public transportation or walks, and rarely takes their car out of the garage, a high deductible makes perfect sense. Sure, the policyholder will have to pay more out of pocket if a claim is made, but the risk of having a claim is relatively low. In the meantime, the policyholder pays less in monthly premiums.
But when this same motorist switched jobs and now had a two-hour daily commute, the high deductible might make less sense because the risk of a fender bender or worse has risen considerably. Get with your insurance agent and crunch the numbers to find the “sweet spot” that works for you – the balance between deductible and premium dollar amounts.
How Acceptance Insurance Can Help You Update Your Policy Easily
We can do it with a phone call. Or a visit to our website. Or an appointment at the office of an Acceptance Insurance agent. In other words, it’s easy.
Your agent will ask a few questions, get an idea of your driving patterns and what’s going on in your life, and offer insight that could result in better coverage at more affordable rates. One strategy your agent might mention is bundling your homeowners and auto insurance, or putting both with the same insurer for impressive discounts on both plans.
It starts with your contact. Just call us at (877) 405-7102, or get a quick online quote. You can also find an Acceptance Insurance office near you and chat face-to-face with a knowledgeable agent.
FAQ
Perhaps you still have more questions on how often you should review your auto insurance policy and related issues. We have answers.
Can I Change My Auto Insurance Policy at Any Time?
Yes. You don’t have to wait until your car insurance renewal period. Just make sure that there’s not even a day’s lapse between the activation of the new policy and the termination of the older one.
Should I Contact My Insurance Agent for Help Reviewing My Policy?
That would be an excellent idea, especially if you’re confused by the contract language or there are too many unfamiliar insurance buzzwords. Your agent should be able to answer all of your questions and suggest car insurance policy updates that might add benefits, reduce costs, or do both.
Can I Review My Auto Insurance Online?
You should be able to. Your insurance provider should have a website that’s easy to understand and provides user-friendly functionality. If they don’t, consider changing your insurer.
