Updated: Dec 4, 2020
Greetings all! I hope this message finds you healthy and looking forward to the upcoming holiday season. I’m taking this time to encourage you to take the time to really look at and understand your current insurance policies. Many policyholders receive their renewal packet, sort through it long enough to find the invoice, perhaps the vehicle ID cards, try to remember how much it cost last year and send in the check. After that it’s filed and forgotten. Many don’t review the coverage descriptions and even fewer actually read the policy language. If the policy is in escrow or some form of auto-pay, they may not even compare premiums one year to the next.
I’m encouraging you to go into the new year with a new and more thorough understanding of all your insurance coverages. The next couple of months, while sometimes hectic, can also bring some downtime. Our current situation, in particular, may provide an hour or two in which you can familiarize yourself with the coverage details contained in your policies, even if it’s only enough to ask informed questions.
An insurance policy is a contract between you, the policyholder, and the insurance company. It conveys certain rights, benefits, duties and obligations to both parties. It can also be one of the most important and valuable financial products you will ever purchase. Since it must address a wide range of claim scenarios along with all the other mechanics of the policy, it is also fairly complex. Most of us would never consider entering into a contract that is literally designed to preserve and protect our financial wellbeing without a thorough understanding
of what it does and doesn’t do. Yet we are constantly encouraged to purchase these important financial instruments “in fifteen minutes or less” or on the basis of which has the cleverest ad campaign. As a result, the nature of what is being purchased is often lost.
This year I’m asking you to think about what you are buying and take the time to understand what the policy or policies is providing. Start with the declaration pages. They show you the specific coverage options you have chosen. Make notes of coverage amounts that don’t seem correct, terminology you don’t understand and descriptions that are unclear. Compare premiums for the past two or three years. Is there a significant increase or decrease? Do you know why? Do you have any new structures, additions, vehicles or other property that don’t seem to be represented? Any liability exposures that aren’t described? In short, take a mental snapshot of your policy. Once you’ve familiarized yourself with your own particulars, take time to read through the policy language. This is the document that comes into play when there is a claim and your adjuster will literally receive and review a copy of your policy in order to determine coverage. You can have the same information at your fingertips. Pay close attention to any endorsements. They are clearly marked as such and can drastically change policy provisions from the standard forms.
Once you’ve gotten familiar with your situation and have your questions ready, contact your insurance provider (hopefully a local, independent agent) and request a review appointment. While it’s always beneficial to have an insurance review, the preparation you will have done will make for a far more valuable and informative exercise. I can almost guarantee you will learn something new and, very likely, want to update your insurance portfolio.
Thank you for your time and please have a safe and pleasant holiday season.