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New year offers an opportunity to reevaluate your insurance policies

Insurance 2021.PNG
New year offers an opportunity to reevaluate your insurance policies

SAGINAW, Mich. - As the new year approaches, many of us are looking forward, making goals and resolutions.

Often times that includes eating healthier, working out more, breaking a bad habit, paying off debt.

But one financial goal we should be looking at is insurance coverages and policies.

Kris Hall, Vice President and a certified insurance counselor for Meadowbrook Insurance offered up a few areas for people to think about as we move into 2021: home insurance, car insurance, and life insurance.

Home Insurance

With more people spending time at home this past year, many have invested in home improvement projects.

If you were one of those people, Hall says it's important to let your insurance agency know for two main reasons.

"Number one, obviously you want to make sure you have enough total coverage to cover your home if it's a total loss due to a fire or a tornado. Number two, there is actually some provisions in home owners insurance policies that require you to notify your insurance company if you for instance add on square footage or make any major improvements above X amount of dollars," Hall said.

Things like finishing a basement, adding a garage or square footage on to your home are good examples.

Hall also recommends inquiring about enhanced replacement cost coverage.

"It takes the coverage that you have, lets say it's 100,000. With that endorsement, for 20 bucks a year or whatever the cost is, it will require the insurance company to kick in an additional 25% in the event that we start rebuilding your house and you run out of money at $100,000, then the insurance carrier will kick in another 25%," explained Hall.

He also said everyone should do a home inventory checklist, which is basically documenting all your most valuable possessions in case you ever have a major loss.

According to Hall, there are apps available to assist with the process, but it can also be as simple as taking a video on their phone.

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Do a 360 of each room, voice over, zoom in on anything of particular value, say how much you paid and where you got it.

"It will take 15-20 minutes. But think if you had a fire, the alternative is sitting down and writing out with an insurance carrier breathing down your neck of everything that you owned and that's a stressful situation to begin with, you don't want to have to be recalling everything you own and you could miss something," said Hall.

Life Insurance

This past year, insurance agencies have seen life insurance applications go through the roof.

With everything that we have been through this year, Hall says people should be looking into life insurance if they don't already have it.

"If you have life insurance through your employer often times that is a group life insurance policy that is contingent upon you working and if you lose this job whether it be from this pandemic or not, a lot of times you risk losing your life insurance coverage," Hall said.

Hall says people should look into their own life insurance policy, but not to dismiss coverage provided by an employer.

That extra coverage would be an additional in case of a job loss or if life insurance through your employer doesn't continue after retirement.

"The key with life insurance, the earlier you do it, quite obviously the better your rates are going to be because you get a little bit older and everyday that goes by the more expensive your policy is going to be or again pre-existing conditions could rule you uninsurable," said Hall.

People with pre-existing health conditions can still get life insurance, but they may need to shop around to find the best deal, with life insurance, pre-existing conditions do count against you.

But, if you buy life insurance before you develop a condition, it can't be taken away from you as long as you keep making payments.

That being said, the earlier you buy life insurance the less expensive it will be.

Hall says this year they saw many 20-year-olds and 30-year-olds purchasing life insurance policies.

Car Insurance

"If we all remember, about six months ago on July 1st, Michigan passed a landmark no-fault auto insurance reform bill," said Hall.

The change completely overhauled a bunch of different coverages, but the two big ones were personal injury protection and bodily injury liability.

Personal injury protection covers your medicals if you or anyone in your family that is on your policy gets injured in a car accident.

"Now for the first time you could if you wanted to, downgrade your personal medical coverage," said Hall. "It was unlimited for everybody, but again, as of July 1 it became the option to downgrade to 500,000 or 250,000 if you want to decrease that coverage and save a bit of premium on car insurance."

Hall says they are telling people to think twice though, as there are a few things that are not fully covered by health insurance such as home care, chiropractor, transportation to and from medical appointments.

The changes in bodily injury liability, is that for the first time, you could be held financially responsible for the medical bills of another party.

"For instance if you get in an accident with somebody who has downgraded their coverage and say they don't have enough, they could turn around and sue you for the excess coverage they need," said Hall. "We all used to have unlimited, it wasn't an issue, but now depending on who you get in an accident with it's a roll of the dice of what type of coverage they have."