Year End Insurance Policy Review – Tips for Lowering Rates & Checking Coverage

As a former claims adjuster, I know that insurance can be frustrating.  You feel like you pay all of this money in premiums and some years you never even make a claim.  Then, when you do file a claim, the insurance company hassles you about it.  I completely understand, and that is part of the reason why I got out of the business. 

Most insurance companies do provide a quality product that consumers need and helps protect against catastrophic loss and expenses.  However, the price of homeowner’s, health, and auto insurance has skyrocketed in the past decade.  The fact is that insurance helps us when we need it most but the most frustrating claims can be the small ones, because most insurance companies nit-pick at them. 

In my experience the big claims are where insurance companies usually follow through with their promise to get you back to the place you were before the incident occurred.  And if they don’t, it’s worth it for you to get an attorney to make them do what they are supposed to do.  We spend thousands of dollars on insurance each year.  After our food and shelter (and taxes) it can be the biggest expense we face each year when you add up what you pay for health, life, homeowner’s, and auto insurance. 

Here are some year-end moves you can make with your insurance policies to help lower your rates and make sure you have enough coverage for next year.

Health Insurance

If you’re with an employer sponsored health plan, then go to the informational meeting that they should provide once a year for those with questions about the policy and options.  Re-evaluate your options to make sure you’re with the one that fits your needs best and is the most cost effective. 

If you are in great health and you have some money stashed away for emergencies already, you could consider a high-deductible plan. These tend to be much cheaper than a PPO and HMO, and they provide the same flexibility of care as a PPO. 

If your health improved, such as quitting smoking, make sure you let your health insurance provider know.  This probably won’t matter if you get your insurance from a group plan, but it can if you buy it on your own.  

Life Insurance

There should be an open enrollment period at your work where you have the chance to change, cancel, or add the insurance coverages provided as benefits to you by the employer.  Re-evaluate your life insurance plan, and make sure it’s still the most competitive rate.  

Auto Insurance

Make any updates that could affect your premiums.  If you added any safety features to your car, let your agent know about it.  Also, re-evaluate your coverages, you can always increase your deductible in order to lower your premium. 

Another tip is to consider increasing your liability coverage if it’s below $100k single limit.  Liability coverage is very important if you cause an accident, and it’s relatively cheap to buy.  

Homeowner’s Insurance

Now is a good time to start doing some research to see if there are any companies with a better rate out there.  Homeowner’s insurance is becoming very competitive like auto insurance, so don’t settle for the same premium every year. 

Also, if you made any major improvements to your home over the year such as an addition or a kitchen upgrade, make sure you increase your dwelling coverage.  God forbid your house ever burns down, but if it does, you want to make sure it is insured to the correct replacement value. 

If you made any safety improvements such as installing a security system, fire sprinkler system, or hurricane shutters, then let your agent know about it.  They often give premium credits for these safety features.  

Flexible Spending Account

If you have a flexible spending account with money still in it, make sure you don’t lose it.  If you don’t use that money by the end of December 31st, it may be gone forever.  In 2005 the IRS decided to allow companies to give employees until March 15^th of the following year to spend the pre-tax balance they had set aside.  However, not all companies offer the grace period so check with your benefits department.

You can buy a pair of glasses, get some dental work done, stock up on medical supplies and/or over-the-counter medications.  Spend it on something that qualifies under the FSA rules, but don’t let it slip away.  Some drug stores are now highlighting items on your receipt that may qualify for reimbursement from your FSA.

It’s wise to keep track of what you allocated and what you actually spend from year to year so you have an idea of how much to sign up for during open enrollment next year.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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