Every year, you get that letter in the mail that provides you with a renewal notice for you insurance policy, and a couple coverage options to consider. Most of the time, these letters are treated just like any other bill, where one simply searches for the bottom dollar, which triggers the sigh of frustration, then simply gets tossed in the pile of other bills to pay. You swipe the credit card, curse your broker, and another year ensues.
Is there more to consider than this?
Short answer is “yes”. There is a lot to consider in terms of renewing an insurance policy. There are cost saving strategies and different carriers which may be able to write your coverage for less, but it all takes a little bit of time and effort to obtain these savings.
Costs go up
If you have been insured through a single carrier for a certain amount of time, chances are good that you have seen a gradual increase of cost every year, and you might begin wondering why that is. Believe it or not, costs increasing over time is very typical in the insurance world, and its largely due to one factor- inflation. Most policies carry a built in feature that inflates the dwelling value to stay in line with current building costs to ensure adequate coverage is in place. These inflation mechanisms can sometimes work too well though, and values can get over inflated. When this happens, it is important to know that there are two options to consider- doing a new home evaluator to see if the limit on your policy is accurate, or you can switch insurance carriers if an evaluator has been recently completed.
This is a basic tool that provides a current value on your home that identifies the cost to rebuild your home as it stands today, along with the debris removal costs to clear the site if your home is damaged beyond repair. These are typically completed every 5 years to keep the dwelling value as accurate as possible, but sometimes there are factors that exist (such as a home renovation or inaccurate square footage reported) that can skew the numbers. Asking about your evaluator can ensure your dwelling value and insurance costs are accurate
If your home evaluator is up to date and there are no variances on the dwelling value that can provide a savings, the next option you can consider is changing insurance carriers. Insurance companies are always competing with each other to provide the best rates, so switching companies might be a good option. You can ask your broker about getting quotes on other products which may instantly save you some money based upon what is available to you
The final cost saving tip is altering or reducing coverage on your policy. This is not the best method for cost savings as it can severely limit your claim settlement, but it is available if needed due to budget constraints. There are typically a few levels of insurance packages you can buy with any given insurance carrier, but it is important to know the limitations of each one, and how it will affect your claim settlement.
When you receive your renewal notice in the mail this year, take a second to consider these tips before you simply toss it in the bill pile. A few minutes of time could save you some money.