CHICAGO – As 2015 wraps up and thoughts turn to the New Year, the Property Casualty Insurers Association of America (PCI) urges homeowners, renters and motorists to review their insurance policies to make sure they’re ready for whatever 2016 may bring.
“As you’re thinking about your New Year’s resolution and setting personal finance goals, making sure your insurance policy is up to date is a good one to add to the list,” said Chris Hackett, PCI’s director of personal lines. “This is the perfect time to review your policy and make certain you have the coverage you need whether a natural disaster or other emergency occurs in the New Year. Having a conversation with your agent or insurance company can help prevent you from being caught financially unprepared,” said Hackett.
While insurance companies will be there if tragedy does strike, it’s important you know what exactly your insurance policy covers. “If you’re not satisfied with your coverage, we encourage you to use this time to shop around for the best policy that fits your needs,” added Hackett.
This past year residents in the Northeast, particularly Boston, experienced extreme winter weather which resulted in record numbers of homeowners claims in January. California and the Northwest suffered through record-setting wildfires this summer. The Okanogan Complex Fire in Washington and the Butte and Valley Fires in California were etched into the record books. This fall Hurricane Joaquin brought torrential rains and historic levels of flooding to the Carolinas. Now with a strong El Nino year, weather patterns could be influenced and there might be major flooding and other weather impacts in the coming months, which is why now is the time to get prepared.
“It was certainly another volatile year for wildfires and now the same areas could be hit with potential devastating flooding, which is not covered under your homeowners policy and must be bought separately,” said Hackett. “But regardless of where you reside it’s important to note that every part of the country is susceptible to an earthquake. Many don’t realize that earthquake coverage, similar to flood coverage, is not included in a typical homeowners insurance policy. If you live in an earthquake prone area talk to your agent about buying this additional coverage.”
As you think about the New Year, PCI offers a few resolutions that will only take a few minutes, but could save you thousands of dollars if the unthinkable happens.
PCI’s 5 New Year Resolutions:
1.) Conduct an annual review of your insurance policy. Call your agent or insurance company to discuss your policy and coverage options. They can assist you in determining the type of policy you should have and the proper amount of coverage for your auto or home.
2.) Know what your insurance policy covers – The details matter. Check whether your homeowners policy pays replacement cost or actual cash value for a covered loss. Actual cash value takes depreciation into account. The replacement cost is the amount necessary to rebuild the home with construction materials of like kind and quality. Talk with your auto insurer about what happens if you get in an accident. Comprehensive coverage will cover flood damage to your vehicle. Ask about towing and rental car coverage.
3.) Create a home inventory of your possessions – Your insurer may have tools available to assist you in creating your home inventory. Additionally, there are other resources you can use such as the Insurance Information Institute’s Know Your Stuff Home Inventory and Know Your Coverage Apps
4.) Consider purchasing flood and/or earthquake coverage – It is a good idea for most people to buy flood insurance because flooding is the most common natural disaster. While flooding and earthquakes are not covered in standard homeowners insurance policies, they can be purchased as separate policies.
5.) Make sure you’re getting the best deal – It is always a good idea to periodically shop around for the best deal, but remember the lowest premium is not always the best option. Make sure to know the amount of your deductibles. The deductible is the amount of a covered loss that the homeowner must pay. The higher the deductible, the lower the premium will be. Inquire about discounts that may be available. There may be discounts for things such as security systems, smoke alarms and steps you have taken to mitigate damage from natural disasters. Additionally some insurers offer discounts for consumers who purchase multiple policies.