When Ben Franklin said, “An ounce of prevention is worth a pound of cure,” he wasn’t—surprise—doling out medical wisdom.
In urging Philadelphians to protect their city from fire, he was dispensing something more akin to insurance advice.
It’s counsel we’d do well to heed, particularly with homeowners and auto insurance policies, which are all too easy to “set and forget.”
Coverage needs change over time, making periodic insurance reviews the prevention we may not realize we need.
Homeowners Insurance: Rising Values, Higher Risk
For many people, home replacement costs will have increased significantly since their homeowner’s policy was put in place.
Last year alone, U.S. house prices rose over 18%, according to the Federal Housing Finance Agency. The upshot? Policies purchased even five years ago might not offer adequate coverage in the event of loss.
Rising construction costs, renovations, and additions also affect the amount of coverage needed. The old “$200 per square foot” rule of thumb is out the window—costs are now $300 or more per square foot.
To avoid being underinsured, homeowners should report home improvements—a bathroom update, kitchen expansion, or even porch, shed, pool, or hot tub addition—to their insurance company.
An additional consideration: California has seen a dramatic spike in homeowners insurance rates due to recent wildfires. There, some insurers are getting out of the business of covering homes in high-risk areas, and Oregon and Washington may follow suit.
Auto Insurance: Expensive Repairs, Soaring Healthcare Costs
An auto accident today can be significantly more expensive than in prior years because cars have become increasingly costly to fix and replace. Adaptive cruise control and blind spot warning systems, for instance, may offer greater safety, but can be expensive to repair.
Bodily injuries can also be extremely costly due to soaring healthcare costs.
To avoid exposure to a substantial liability, policy holders may need to adjust liability coverage for underinsured and uninsured motorists, particularly in Washington, which is fifth in the nation for uninsured drivers. (Oregon ranks #30.) Vista recommends $500,000 per incident as well as an umbrella policy.
There’s good news on the auto insurance front, too. Retirees who used to commute to a job should check whether driving fewer miles can lower the cost of auto premiums. And drivers over the age of 50 to 55 may be eligible for a discount with certain insurance companies.
Review, Don’t Auto Renew
When life changes or an insurance policy is up for renewal, don’t miss the chance to actively review and adjust coverage levels.
You’ll gain peace of mind as you minimize risk and more confidence you’ll be able to stay on track with your financial goals.
Vista is glad to help you assess your insurance needs and connect you with a trusted independent insurance broker.