Nine insurance resolutions to make for 2012
December 22nd, 2011
Gina Roberts-Grey
When the clock strikes midnight on New Year’s Eve, what promises will you make to yourself? Lose weight? Quit smoking? Find a new job?
Experts say you can make some insurance resolutions that will help 2012 get off on the right foot. They might even save you a few bucks — perhaps addressing a New Year’s resolution to save money.
1. Ask for discounts.
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Check with your auto or home insurance agent to make sure you’re receiving all of the discounts you’re eligible for. Insurance companies continue to roll out discounts like accident forgiveness and disappearing deductibles.
By running through an annual analysis with your insurance agent, you can save every penny available, says Tara Reynolds, a vice president at MassMutual. For example, you may be eligible for a discount of 1 percent to 10 percent if you install a security system in your home.
2. Assess your life insurance needs.
“There’s a common misconception that you only need to review your life insurance needs when big milestones occur,” Reynolds says.
However, earning a raise, taking on debt or having to care for a family member are among the non-milestone reasons you might need to adjust or add life insurance. Why not take a look at this type of insurance when you’re ushering in the new year?
3. Protect your most valuable asset — yourself.
Disability insurance is one of the most important types of insurance, but Reynolds says it’s also one that’s frequently overlooked. “This type of insurance provides replacement income should you get sick or injured and become unable to work,” Reynolds says.
Todd Katz, executive vice president at MetLife, says a good rule of thumb is to protect 60 percent to 80 percent of your after-tax income with disability insurance. That way, you can cover essential expenses like housing, food, transportation and health care. “You will need to meet your essential living expenses if you should become disabled,” Katz says.
Katz notes that some disability insurance is better than no disability insurance at all. The cost varies drastically — from a few hundred dollars to thousands of dollars — based on such factors as age, gender and amount of coverage.
“If your budget is tight, it still makes sense to buy enough disability insurance to cover the rent or mortgage and keep your family in their home should you become disabled,” he says.
4. Prepare a home inventory.
The time to document what you own is now, not once you’ve suffered a loss, says Ron Reitz, president of San Diego-based Quality Claims Management, a company that provided hazard claim recovery services.
A home inventory should include a description of each household item, along with its age, its replacement cost, where it was purchased and when you acquired it, according to Reitz. Photos of household items are suggested as well.
“I recommend an annual family meeting to compile or update an inventory of all of your possessions,” Katz says. “The best time to do this is the beginning of each year — right after the holidays — when you may have lots of shiny new toys, electronics, jewelry and other gifts.”
You also might want to videotape your house inside and outside. Go room by room, opening drawers, closets, boxes and other places to reveal your belongings. Make sure you take video of your backyard, front yard, outbuildings, fencing and walls. Experts recommend that you store the video at an off-site location like your office or a safe deposit box, or upload it to an electronic backup system.
5. Spread the word.
Alert your friends and loved ones about what type of insurance coverage you have and where details about your policies are located.
If you need to tap your life, disability or long-term care insurance, “you might not be capable of conveying important details about your insurance if your family needs the policy information,” says Eric Hirsch, a financial adviser at Signature Financial Partners LLC, which has offices in Maryland and Virginia.
You’ll also want to share information about your auto and home insurance, in case you’re in injured in a car crash or are the victim of a home fire and need help filing insurance claims.
6. Update your life insurance beneficiaries.
From weddings and births to divorces and deaths, a lot can change in a year.
“Now is a good time to review your (life) insurance beneficiary designations and make sure they reflect any family changes that may have taken place over the last year,” Reynolds says.
7. Create an emergency plan.
If a fire, flood, hurricane or other disaster hits your house, who will take care of your pets or grab the important papers and phone numbers? If you have young children, who will take care of them if you can’t? If your family gets separated during a disaster, how will you find each other? If you lose your cellphones, do you know your insurance agent’s number?
Reitz suggests ringing in the new year with a plan that answers these – and similar – questions. Doing so will make it easier to file a disaster claim with your home or auto insurer.
8. Go paperless.
Progressive customers who sign their policies online receive a one-time $ 50 discount. Elephant auto insurance policyholders who opt for paperless policies save 2 percent on their premiums. Aside from possibly putting some extra money in your pocket, going paperless helps the environment.
9. Read your policy.
It sounds simple, yet few consumers take the time to actually pore over the declaration pages and fine print of their insurance policies. That can lead to confusion and disappointment when you file a claim but it’s denied. For instance, standard home insurance policies don’t cover maintenance-related claims like repairing a roof or repainting a house, yet many policyholders mistakenly think they do.
“If there’s the slightest aspect you don’t understand, make a note and call your agent on January 2nd,” Reitz says.
Gina Roberts-Grey
There’s no denying that spare keys come in handy if you’re locked out of your home or car. But those keys can quickly lead to a security breach.
“There’s no such thing as a spare key,” says Robert Siciliano, a personal security expert. “Every key is the key to your home or car.”
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| Experts warn against hiding your spare house key under a rock in your yard. |
In addition to putting your home, car and belongings in danger, those spare keys could cost you in the form of higher insurance premiums. Too many home insurance or auto insurance claims in three years could result in raised rates — or even cause your carrier not to renew your policy, says J.R. Couch, a Farmers Insurance agent in Arizona.
False sense of security
For many people, hiding a spare key under a planter or rock in their yard gives them a feeling of security.
“It’s comforting to know that if the kids get locked out after school or I forget to grab the house keys, we can get back in,” Dallas resident Mike Elliot says.
But experts say that perceived security isn’t secure at all. Hidden keys actually reduce your security, says Timothy Dimoff, president of SACS Consulting & Investigative Services Inc. in Akron, Ohio. They not only increase your risk of theft, but put your personal safety in jeopardy.
Other options
As an alternative to hiding a key under a rock, many people ask neighbors to hold onto a key. Under ideal circumstances, this can be a great option, but proceed with caution, Siciliano says.
“Even if your neighbor is completely trustworthy, extended family, friends and other visitors to their home might not be,” he says.
When choosing a neighbor as the keeper of your key, Dimoff recommends skipping those who have teenagers. “Even if the teen is a great, upstanding kid, you don’t know his friends and their penchant for hijinks,” he says.
You also should make sure your neighbor doesn’t put an identifying label on your key, Siciliano says. That way, if your neighbor’s house is burglarized, the thief won’t have easy access to your house.
Furthermore, ensure that your neighbor doesn’t keep your key on a key hook that’s near the door or in plain sight. “Those keys are asking to be stolen by visitors to your neighbor’s home,” Dimoff says.
Instead, suggest that your neighbor find an unusual spot in his or her home for your keys.
“Ask them to tape your keys to the back of a framed family photo,” Siciliano says. “Or buy a secret safe that looks like a cleanser can for your neighbor to keep your key in their laundry room.”
The hidden truth
If you absolutely must hide a key in the yard, never hide it anywhere near the front or back doors. “Most keys are hidden within 5 feet of the door, and thieves know that,” Dimoff says.
Other obvious hiding spots — such as under rocks and welcome mats, in ceramic key holders disguised as garden art and in the back of mailboxes — aren’t smart choices either.
“Thieves know all the typical hiding places,” Siciliano says. “It is not a good idea to hide keys in spots that people frequently use, because criminals check these places first.”
If hiding a key is your only option, Siciliano recommends these locations for the utmost security:
• Behind a false shingle on the side of the house.
• Inside a doghouse under a false compartment.
• Inside a soda can that’s tucked inside a bush. Just make sure you can’t see it from the yard or the street.
• In a sealed, heat-resistant, fireproof container inside your barbecue pit.
Your best bet
The safest way to stash a key is tucking one in a protected lock box like one you might see a real estate agent use.
Of course, a keypad on a garage door is one way to bypass the need for a spare key. If you do install a keypad, Siciliano recommends changing the passcode once every three months.
The drive to keep car keys safe
Dimoff says the same rules for house keys apply to car keys.
“Thieves look for those magnetic key boxes to store car keys in and can find those boxes in less than 2 seconds,” he says.
If you are prone to losing your keys and getting locked out of your car, Dimoff recommends that you “save yourself the heartache of a stolen car and opt for roadside service instead.”
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