HAS YOUR INSURANCE KEPT UP WITH THE TIMES?

HAS YOUR INSURANCE KEPT UP WITH THE TIMES?

Warwick, RI, February 17, 2010

Can you still fit into the jeans you wore in college? For many, the waistline might be snug and the buttons dangerously close to popping. Even if they do fit, styles change and most people wouldn’t dream of wearing the same outfit decades later. However, the same can’t be said for updating personal insurance coverage, even though the fit of an insurance policy is far more important than the fit of clothing. This failure to keep up with the times can be worse, because the auto and home insurance needs of someone just starting out are much different than the needs of a person with more life experience under his or her belt. In the event of a loss, the difference could be financially disastrous.

“Too often, the importance of having the right insurance is not realized until a loss occurs, and consumers are left paying more than expected,” said Bob Lundgren, vice president for marketing and product development of MetLife Auto & Home^®. “As time goes by, most of us tend to accumulate things of value—rewards for working hard. Too many people unknowingly allow an insurance gap to develop over time by forgetting to take a look at whether their insurance coverage is sufficient, and may be surprised to discover this could leave them paying out of pocket in the event of a claim. Fortunately, it’s never too late to step back and take a quick inventory of where you’ve been and what you have.”

When taking stock, ask yourself the following:

• Have you accumulated a lot of valuables?. The standard homeowners policy has a $1,500 limit for items such as jewelry, watches, and furs, and $2,500 for silverware. Over time, these limits may no longer be sufficient.
  
  
• How much will you need to repair or rebuild? Although values have decreased in the past year, the fact remains that the cost of home repairs continues to rise. Especially if you’ve made a lot of home improvements through the years, your property may be underinsured.

• Has the age of your house cracked the building code? Most people incorrectly assume that if a loss occurs, their home insurance would pay for upgrades to the property required by today’s building code or ordinances, such as upgraded wiring. In fact, most policies do not cover these upgrades, leaving homeowners in a financial bind. Over the years, the need for ‘ordinance or law’ coverage becomes increasingly important.

• Do you have a lot to be liable for? People who have much to show for years of hard work need to take a look at their personal liability limits. This is the coverage on your auto and home insurance policies that protects against personal injury lawsuits. Having low limits may expose your personal assets if your coverage is not adequate to cover a large loss.

• Will you end up paying too much out of pocket? As time goes by, people acquire things—automobiles, houses, and secondary items, such as boats and vacation properties—and these items often necessitate separate insurance policies. Consider combining everything through a “package policy.” In addition to simplifying bills, it will lower the amount paid out of pocket, in the form of one standard deductible applied to any loss. This can mean significant savings if a large loss occurs.
   

Another benefit to a package policy is that it can help reduce gaps in protection that may exist with simple “standalone” policies. Auto, home and other policies that are written on a standalone basis or through different insurance companies have a tendency to leave gaps in coverage, which can result in unforeseen out-of-pocket financial “surprises” at the time of a loss. By securing a package policy, this can be avoided.

“A package policy can be the ideal solution for a person with more complex insurance needs,” said Lundgren. “These policies have the ease and convenience of one deductible, one bill, and one renewal date. A package policy can also provide you with comprehensive insurance protection and higher coverage limits than the standard policy. The end result is greater peace of mind.”