Get to know your insurance policies on a close personal basis

My coworker often says "insurance is the one thing you buy not wanting to use."

How true is that? Think of all the insurance you pay (an extraordinary amount of money) for…auto, home, personal property, health, long-term care, vacation…life. None have claims that I would be happy to file, but all offer insurance coverage I would be happy to have in the event of a casualty.

Each May I go through the process of reviewing my own insurance renewal documents. A task that I don't entirely enjoy and I am sure my insurance agent even more so. I ask questions. I look at the details. I compare not only the cost, but the coverage from prior years. Once I get through the tedious task with a dozen emails and/or a 45-minute phone call with my agent, I feel empowered with knowledge and am comforted by knowing what exactly my family is covered for and to what extent. Then I file these document away, hoping not to use, until next year's process.

I work in the industry. Insurance planning and risk management is one of the core components of financial planning. One of the reasons I entered the field of study at Texas A&M was knowing that the topics learned would eventually help me in my own life. Selfish? No, I knew I could make a career out of helping people too. So, let's get to it…below are 10 insurance tips and tricks:

1) Make it a process to actually review your coverage annually, not just the cost.

2) Find a reputable agent that can independently shop a variety of highly rated insurance carriers.

3) Ask agent (from tip No. 2) for a list of discounts that you may be eligible for. Also know that some companies offer additional membership benefits and discounts for things like travel, vehicles, services and products.

4) Know your deductible amounts for each of your insurance policies. Keep your emergency fund fluid to cover these deductibles.

5) Review the policy riders (aka "insurance add-ons"). Do these add value to you? If you experience a health-related change such as cancer diagnosis, certain insurance riders may be triggered for your benefit. It pays to know what riders exist on each policy.

6) Be cautious filing a claim. This tip hurts to say, but know that a claim may raise the cost of your renewal in the future. So, filing a claim for a window chip on your comprehensive auto coverage should be used sparingly and consider paying for replacement out of pocket.

7) Inventory documentation. The better documentation or proof you have, the easier a future claim will be. For personal property, I was advised to use a smart phone to periodically record a walkthrough of my home, then save to the cloud or electronically.

8) Not too little, not too much, make sure your coverage is just right. Know the replacement value of your insured items, coverage should align. Calculate an appropriate amount of life insurance coverage for each spouse.

9) Know what's not covered. Understand where coverage ends. Consider other types of endorsements or policies to extend your coverage. Decide on the cost vs. benefit to each.

10) Read and understand the definitions in your policy. Ask questions and gain clarification. A CFP professional can help. The Texas Department of Insurance also is a great resource for fellow Texans.