9 Rules to Optimizing Your Property & Casualty Insurances

Auto and homeowners insurance are two insurances that are often set it and forget it in an individual’s life.  I understand this isn’t always top of our minds, but we often find people aren’t taking full advantage of their benefits as they should.  Let’s go over my top tricks to optimizing these insurances.

Rule 1: Not looking at your rates every few years.  

With P&C insurance prices will increase steadily over time and sometimes new incentive plans will fall off.  Like your Comcast bill, I recommend every few years shopping around to see comparable rates.  Another way to shop around using your same provider is to call up your agent and ask them to give you a rerate on your coverage.  Often enough a rerate will take advantage of new incentives and lower your price immediately.

Rule 2: Having multiple carriers for your home and cars.  

Most insurers in this space give a hefty discount to using them for both auto and homeowners insurances.  Recognizing it isn’t always feasible, but when it is I’d suggest inquiring what the rates would be if you consolidated under one carrier.

Rule 3: Leaving discounts on the table.  

There are a plethora of different discounts ripe for the picking in the property & casualty insurance world.  There are the obvious ones such as taking an online driver safety course and then there is a list of less common ones.   Many of us don’t take advantage of these lesser-known discounts when we should.  Here is my quick list of some of the most missed ones we run into:

• Military Discount
• College Discount
• Good Student Discount
• Employer Discount
• Good Driver Discount
• Righttrack or similar driving monitor program

Rule 4: Bill payment method.  

Most insurance companies offer a discount if you pay their premiums annually vs. less frequently.  Simple math they get the dollars quicker and can start investing them sooner than later.  Naturally, same can be said for keeping your premium dollars and paying over a longer period of time.

Rule 5: Having too little coverage.  

There are many ways individuals underinsure themselves in this world.  Having too little coverage in auto insurance, and not covering the full replacement value of your home are probably the two most common.  Remember, just because you are insured for auto accident liability for $50,000 doesn’t mean you can’t be sued for much greater.

Rule 6: Having too much coverage.  

Most people don’t realize that your homeowner’s insurance will only pay to rebuild your home from scratch, not the value of your home and land together.  It is important to not be paying for superfluous coverage that will never be paid.

Rule 7: Having no umbrella coverage. 

This is a commonly missed coverage that can prove beneficial.  As I stated earlier, even if you have ample coverage on your auto/home coverage it doesn’t prevent a judge or jury awarding far in excess of the basic limits.  This is where an umbrella policy comes in.  The way they work is by kicking in coverage, up to a limit (usually in million-dollar increments), once the basic limits of your auto and homeowner insurance policy are exceeded.  For example, if you owned a $1,000,000 umbrella policy and your auto insurance says you are covered up to $100,000 per accident per individual up to a $250,000 maximum.  Now, what happens if you are responsible for a 10 car accident and there is $1,000,000 of claims filed against you?  Your auto insurance would cover the first $250,000 and your umbrella will kick in to cover the remaining $750,000 above and beyond, rather than paying out of pocket.  As you can see very beneficial and they are pretty inexpensive as well.

Rule 8: Failing to have a personal articles policy.  

A basic homeowners insurance will cover valuables such as jewelry or art only up to a small limit.  Since our homes protect some of our most expensive assets it is highly recommended to make sure your valuables are fully covered by adding them to an inexpensive personal articles policy.

Rule 9: Check those deductibles. 

This a great way to lower and increase the costs of your policies.  They are also frequently not at the appropriate level overexposing themselves to losses.  In addition, some homeowner’s policies will have a deductible for certain damages, like wind or hail that is 2% of the value of your home.  This can quickly lead to a $10,000 plus the deductible. There are many things that can be confusing or misunderstood when it comes to covering your home and auto insurance.  It is important you fully understand what is and isn’t covered so in the midst of a tragedy one day you don’t add insult to injury by not being properly protected.