Insurance

Your handy insurance checklist for the New Year

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As a new year gets underway, it’s often a time of reflection. We’ll look back on the past 12 months, and use those lessons to help us plan for 2022.

That same mindset applies to auto and home insurance, too — there are certain insurance components you should check in on every year. Since we’re in the peak season of New Year’s resolutions, why not accomplish a few goals already?

We’ll even help you get started. Here’s your insurance checklist for the new year.

Compare pricing

Do you think you’re spending too much on auto insurance? You very well may be. But you’ll never know if you don’t do a little comparison shopping.

Regularly check in on your insurance policy to see what’s happening with your premium. It may have gone up even with a good driving record, or perhaps an accident has caused it to skyrocket. If you’re enrolled in a telematics insurance program, you may also see your premiums changing regularly from month to month. That could warrant a switch if it gives you a sense of unease.

We recommend comparing insurance pricing every six months. Luckily, we’ve made it simple: you can compare rates side-by-side from GEICO, Nationwide, Liberty Mutual, Allstate and 100 other companies below!

Compare insurance rates quickly and easily.

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Decide on your auto and home coverage options

While auto and home insurance are essential, the amount and types of coverage available can be fairly overwhelming. 

Typically, all drivers must carry bodily injury and property damage liability coverage. Your liability requirements will change by state, and if you live in a no-fault insurance state, you also need to carry personal injury protection (PIP) insurance. That type of coverage means everyone is responsible for bodily injury and medical costs after an accident, no matter who was at fault.

It’s also a good idea to get physical damage coverage. As the name suggests, this type of coverage protects your vehicle from damage. The two most common types of physical damage coverage are collision and comprehensive — see the differences here — and typically come with a deductible.

There’s also insurance coverage for things like uninsured property damage coverage (in the event you get into an accident with another driver and they don’t have insurance), new car replacement coverage, mechanical breakdown coverage and a lot more. See a full list here.

Talk with your insurance provider to understand how these different types of coverages might be applied. You may realize you don’t need a certain coverage depending on where you live and your driving record.

Learn the replacement cost of your home

A key element of a homeowners insurance policy is understanding your home’s replacement cost. This is also called your dwelling coverage limit and calculates the cost of repairing or replacing your home if it’s damaged or destroyed.

It’s important to note the replacement cost is not the same as your home’s market value. You can’t just pop onto Zillow or another home valuation site and jot down the estimate for your property. 

Additionally, to be fully covered, your dwelling limit must be at least 80% of your home’s rebuild value. Otherwise, the insurer only has to cover damages proportionally to your coverage level.

Several different factors impact your home’s rebuild cost. The age and square footage of your home, your foundation and roof type, local building and zoning codes and any home additions or upgrades are all things to consider.

Because you may regularly be making changes to your home over the years, annually calculating your home’s replacement cost — and updating it with your insurer if need be — is a good idea.

Learn how to quickly calculate your home replacement cost.

Check for new exclusions

Even though insurance policies cover many situations, there are generally exclusions within coverage. For example, a typical home insurance policy doesn’t cover damage from natural disasters, like floods, earthquakes or hurricanes. Certain insurance providers may also not cover pets, or will only cover certain breeds.

At the start of the year, check for exclusions in your policy. It’s possible they’ve been added in without you realizing it. These exclusions could include major purchases like jewelry, artwork or electronics. 

If you do see an exclusion for something that you’re concerned about, it may be worth purchasing standalone coverage. For instance, while certain states require types of weather coverage, it may be optional in your state. 

Learn more about property insurance and what’s included — and excluded — here.

Ask for discounts or lower premiums

Insurance companies can offer discounts for a variety of reasons. You might be able to lower your premiums by being a good driver, a good student, a military veteran, bundling auto and home insurance or having one of several other attributes.

However, not all insurance companies offer the same discounts. And in fact, many won’t even alert you to the types of deals you could be getting unless you happen to call them and ask.

As you’re shopping around for insurance, don’t be afraid to reach out to your current company (or a company you’re considering switching to) and inquire about the discounts available. If you’ve got a good driving record or are currently a student or in the military, feel free to mention that, too. 

You’ll get different offers depending on the company, but you can usually score a good deal and reduce your monthly premium by 5-25% with most discounts. That adds up to hundreds of dollars of savings per year!

Learn more about the types of insurance discounts you can receive.

The new year offers plenty of excitement as we plan for what lies ahead. Follow this checklist to make your car and home even more welcoming.

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Joey Held
Joey Held

As a writer, Joey Held has specialized in business, marketing, sports, music and insurance topics for more than a decade. He's also a podcaster and author of Kind, But Kind of Weird: Short Stories on Life's Relationships. His first car was a Buick Regal with an inconsistent radio but pretty good gas mileage.