Everyday Cheapskate You need an insurance checkup

From regular oil changes to changing furnace filters and annual trips to the dentist, smart consumers know that preventive maintenance can avoid costly repairs down the road. Insurance is another item that needs to go on your routine maintenance list.

Here’s the challenge: No one wants to think about insurance unless forced to. But at least once a year, it’s important that you do a quick review to make sure you have the right amount of coverage at the best price.

Some of us have to learn these things the hard way. I really don’t know how many years we paid for a special rider to cover my husband’s photography equipment on our homeowner’s policy. Sure, it was a good idea when he was actually a photographer. But that rider rode on for many years after he’d sold the equipment.

And then there’s my friend, Lucy, who got tired of me nagging her and agreed to shop her car insurance. Within 15 minutes after calling an insurance broker, she had a quote for identical coverage at $500 less per year. Her problem was the loyalty she felt for the agent she’d been with for 13 years. But $500 is a lot of money, so she called him to break the news that she would be moving on to cheaper pastures. “Wait,” the agent pleaded. “Give me one day to try to beat that quote.” He did, and rewrote her policy for $600 less per year with no changes in coverage.

As your policies come up for renewal, take a little time to shop around.

Automobile insurance

As your cars age, your insurance needs change. Factor in age and condition when you choose your deductible. You probably want a high deductible on an older car that it won’t make sense to fix in the event of a fender bender. Changes in the number of young drivers included in your policy, the distance you commute to work and where you park your car will also significantly affect your premiums. Inquire about other discounts for which you may qualify for, like being a good driver or good student.

Homeowner insurance

If you are a homeowner, take an inventory of your belongings once a year and adjust your contents coverage accordingly. Review all riders and addendum. Update or delete as appropriate. Look closely for changes that the insurance company has made in your coverage. You want to know about this before disaster strikes. Remodeling, renovation and major purchases like appliances should be factored into your policy. A new roof or security system may actually reduce your premium.

Life insurance

How you update your life insurance depends on what type of policy you have. For term life, do a quick comparison of premiums to see if yours are still competitive, especially if your insurer raises them more than you expected. Term insurance is cheap these days, so take advantage.

For whole-life insurance, get rid of riders you no longer need. If you find you don’t need as much coverage as you’re paying for, request a reduction of the face amount (a “partial surrender”). Watch for extra fees and if you see them, ask that they be waived or negotiated down.

When making changes in insurance coverage, never cancel one policy until you are certain its replacement is in full force and effect. You don’t want to run the risk of even the smallest gap in coverage.

Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, “Ask Mary.” This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog, and the author of the book “Debt-Proof Living.”