Auto Insurance Forum: New York insurance checklist
By A. Craig Purcell
As we embark upon a new year, it naturally prompts a period of introspection and planning. We have the opportunity to retrospectively examine the last 12 months, extracting valuable insights to help form our plans for the new year.
This thought process is not exclusive to personal reflection but extends to essential matters such as automobile and homeowner’s insurance. Conducting an annual review of some insurance components is advisable to ensure the best coverage. Given the prevalent spirit of setting and achieving resolutions during this peak season, why not proactively address a few insurance-related objectives?
To facilitate this process, we are pleased to offer a comprehensive insurance checklist for the new year, aiding you in navigating this crucial aspect of financial planning.
1. Compare rates: Do you believe you’re overpaying for auto insurance? You very well may be. But you’ll never know unless you do some comparison shopping. You should review your insurance policy to determine how your premium is trending. It is possible that despite maintaining an exemplary driving record, your premium may have experienced an increase. Alternatively, an unfortunate accident could have precipitated a significant spike. Participants in telematics insurance programs may observe regular fluctuations in premiums on a monthly basis, potentially necessitating a reconsideration if such uncertainty induces unease. Awareness of these subtleties helps you make well-informed decisions and guarantees that your insurance coverage meets your needs and expectations.
2. Find out how much it would cost to replace your home: Understanding your home’s replacement cost is a critical component of a homeowners insurance policy. This is also known as your dwelling coverage limit, and it determines the cost of repairing or replacing your home if it is damaged or destroyed.
It’s important to understand that the replacement cost is not the same as the market value of your home. You can’t just go to Zillow or another home valuation website and get an estimate for your house.
Furthermore, in order to be fully covered, your dwelling limit must be at least 80% of the rebuild value of your home. Otherwise, the insurer is only required to cover damages in proportion to the amount of coverage you have.
Several factors influence the cost of rebuilding your home. Consider the age and square footage of your home, the type of foundation and roof, local building and zoning codes, and any home additions or upgrades.
Given the likelihood of modifications or renovations to your home over the years, it is advisable to compute the replacement cost of your home annually. Likewise, promptly updating this valuation with your insurer, as necessary, is a prudent practice to ensure that your coverage aligns accurately with the current value of your property.
3. Keep an eye out for new exclusions: Even though insurance policies cover a wide range of situations, there are usually exclusions. A typical home insurance policy, for example, does not cover damage caused by natural disasters such as floods, earthquakes, or hurricanes. Certain insurance companies may also refuse to cover pets or may only cover certain breeds.
Check your policy for exclusions at the start of the year. It’s possible they were added without your knowledge. Exclusions could include large purchases such as jewelry, artwork, or electronics. If you notice an exclusion for something that concerns you, it may be worthwhile to purchase separate coverage.
4. It doesn’t hurt to ask for a discounted or reduced premium: Insurance providers extend discounts for a myriad of reasons, such as exemplary driving records, academic achievements, military service, and the bundling of auto and home insurance, among others. It is worth noting, however, that not all insurance companies offer identical discount structures. Indeed, many may not proactively communicate the full spectrum of available discounts unless prompted by a customer inquiry.
While exploring all your insurance options, it is prudent to proactively engage with your current insurer or prospective ones to inquire about available discounts. Whether you possess a commendable driving history, hold student status, or have a military background, it is advantageous to communicate these attributes during your inquiry.
Discount offerings may vary across different insurers, but it is not uncommon to secure substantial reductions on monthly premiums. This translates to noteworthy annual savings, potentially amounting to hundreds of dollars.
As the new year unfolds, filled with anticipation for what lies ahead, consider using this checklist to help usher in a more welcoming and financially prudent future.
A. Craig Purcell, Esq. is a partner at the law firm of Glynn Mercep Purcell and Morrison LLP in Setauket and is a former President of the Suffolk County Bar Association and Vice President of the New York State Bar Association.
