4 Reasons You Need an Annual Business Insurance Review

If you're like most folks, you probably have quite a number of insurance policies, including life insurance, health insurance, homeowner's insurance, auto insurance and, if you're a business owner, business insurance. Experts agree that it's a good idea to review your insurance coverage on a regular basis, and many suggest you do this annually for the following reasons:

• Life's circumstances change and you don't want to find yourself suddenly underinsured or be paying needlessly for coverage you no longer require.
• Policy errors may exist that you might not otherwise realize.
• You may find that your rates are no longer competitive with rates being offered by another insurer and you may qualify for a better deal than you're currently getting from your insurer.
• The total amount of your assets has appreciated or your income has risen significantly.

Reasons for an Annual Business Insurance Review

As a business owner, your business insurance coverage is vital in protecting your business from harm that could be caused by unexpected events such as a liability lawsuit or the loss of property or assets. Chances are you purchased your business insurance policy when your business was first started and perhaps you haven't really given it any thought since then. Here are some important reasons for reviewing your coverage on a regular, annual basis:

1. Business conditions change constantly with changes to your industry and those of your clients' needs. Sometimes new situations can be created that aren't necessarily covered by your original policy and gaps may occur in your coverage that may need to be filled. Regular reviews of your business policy can uncover these gaps and allow them to be dealt with properly.
2. You may be spending money unnecessarily by paying for certain coverage that you no longer need. If your coverage has become excessive in any areas and this goes unchecked you may be throwing money away. Regular reviews can help prevent these wasted assets.
3. Certain sized companies in North Carolina are required to carry Worker's Compensation Insurance on employees and a regular review of your company's insurance status will uncover when and if your organization falls within the law in this particular area.
4. While reviewing your business insurance coverage you should compare your current rates with competing insurers to determine if you could get a better premium rate. Saving money on insurance premiums is a sure way to add to your company's bottom line.   

High Versus Low Deductibles: 3 Things to Consider

Buying insurance is a risk-sharing proposition. Both you and your insurer are hoping that nothing will happen to require you to make a claim against your policy, whether it's automobile, homeowners or any other type of coverage, but you want the protection just in case. It's always better to have it and not need it than to need it and not have it.

An insurance company assumes the risk of your house burning down or being robbed (homeowners coverage) or your vehicle being in an accident or stolen (auto insurance) in exchange for a specified amount of financial consideration called the insurance premium. These insurance policies also include insurance deductibles, which is the amount of money you, as the policyholder, must pay out-of-pocket before the insurer pays on a valid claim. Insurance deductibles are your way of sharing some of the risk with your insurer and the amount for which you'll be responsible is your choice. You may opt for a high deductible, a low deductible or, in some cases, even a zero deductible. Here are some things to consider when making your choice:

1. The amount of your deductible is the amount of risk you're willing to share with your insurer against a loss. Insurance companies prefer higher insurance deductibles since the higher the deductible the lower the risk they're covering.
2. Higher deductibles equal lower premium payments. Experts agree you should pick a deductible that's as high as you can reasonably afford to pay out-of-pocket in the event you suffer a loss. You may consider taking the savings you'll save on premiums and invest it in measures that increase your safety, such as burglar alarms or high-tech fire alarm systems. These will not only lessen your chances of suffering certain losses but may also qualify you for a premium discount from your insurance company.
3. There's a current trend toward higher deductibles and many experts agree that choosing too low of a deductible is a characteristic mistake of those buying insurance. Typical homeowner's insurance policies are purchased with a $500 or $1000 deductible. For a home insured for one million dollars, upping the deductible to $2,500 could mean annual savings of up to $300. Savings on a $5,000 deductible policy could be double that.

Whatever you choose, your deductible should be an amount that you'd be able to pay without undue hardship in the event of a claim.

How Often Should I Review My Life Insurance Policy?

Conventional wisdom dictates that, as an insurance policyholder, you should review your coverage every 12 to 18 months. This includes your vehicle insurance, homeowner's insurance, life insurance, business insurance if you carry it, and any other policies you may have. It's important to have regular reviews of your life insurance coverage since our lives have a way of experiencing  changes fairly often.

You certainly don't want to get caught being underinsured nor do you want to be overpaying for coverage you no longer need, so it's just a prudent financial practice to conduct regular reviews, especially on your life insurance policy. You may find that nothing requiring a change to your coverage has occurred since the last review, but at least by checking you'll know for sure. Here's a partial list of events that typically calls for taking another close look at your coverage to ensure that it accurately reflects your current needs:

• You've gotten married, divorced or added a new significant other to your life. You probably want to not only take a look at your named beneficiaries but also your coverage amount.
• You've either had a child or a grandchild born or one or more of your children have recently left the nest.
• You've recently taken on new financial commitments such as buying a house, an automobile, recreational vehicle, etc. These additional debts could cause undue strain for your family in the event of your untimely death.
• If you've recently finished paying off some past debts, leaving less in the way of financial commitments, you may decide to adjust your amount of life insurance coverage downward.
• If your family income level has increased significantly since first taking out your life coverage you may have become used to a higher standard of living. This is something you'll want to consider as you review the amount of the death benefit on your policy.

Reviewing your life coverage annually may actually not be often enough if one of life's big events occurs sooner. Consider meeting with your agent whenever any of these occurs.