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Insurance and Life Changes – Part I

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by Treva Cassidy, CISR, ACSRC on Oct 09, 2013

Insurance is an important part of your financial plan.  You work hard to build your life and insurance is how to protect yourself from financial loss. Part of your insurance plan is to periodically take a look at your life and finances as a whole and make sure you have proper insurance.  There are certain life changes that should trigger an insurance review.  Here is the first part of a two part article where we will take a look at some major life changes and why you need to review your insurance at these times in your life.

  • Graduating College /Starting into the Workforce:  Whether or not you go to college, this is a point in your life you need to review your insurance.  If you have your own car or are buying your first car, learn how your car insurance works and what each part does so you can make informed decisions about your coverage.  If you (or Mom & Dad) bought minimum limits to save money, consider increasing your liability limits to at least $100,000 per person/300,000 per accident.  If you are living in your own apartment, your landlord’s insurance policy will not pay for your stuff if something, such as a fire or theft happens.  You are starting to collect your own valuable items of your own such as tablet computers, smart phones etc. Renter’s insurance will protect your personal property and give you liability coverage in case you cause damage to the apartment or cause injury to someone.
  • Getting Married/Domestic Partners: You have found that special someone and are taking the big step into financial unity.  Along with sitting down with your partner to discuss your savings and family plans, you need to review your insurance.  On your auto policies, both partners should be carrying liability coverage that matches. Both of you should be drivers on each other’s policies and look at combining them for savings.  This is also the time to look into life and disability insurance to protect your partner should something happen to you (see previous article).  If you are still renting, be sure both of you are covered on a Renter’s policy for personal property and liability.
  • Buying Your First Home:  When you purchase a home, you will definitely need an in depth insurance review.  It will likely be the largest asset you have and you need to know how home insurance works.  Whether or not you are married, you need to know how to protect both partners on the policy, especially if only one of you is going on the deed.  Consider what each person does in the home: is one of you running a business from the home?  Does one of you have an expensive sports memorabilia collection or valuable jewelry?  These examples require special attention from an insurance prospective because there are certain limitations on home policies with regards to such needs.  You will want to have enough property and liability coverage to protect you if you have a loss or if either person is involved in a lawsuit.  Now that you have bought your home, review your auto insurance again and make sure you increase your liability limits to at least $250,000/500,000 to protect your home.  Also look at the benefits of an Umbrella policy which gives you an extra layer of liability protection in the event of a lawsuit that exceeds your auto and home liability coverage.

There are so many things to think about when you have a life change, we could probably never write them all down.  We are here to help you make important insurance decisions.  Make sure you check out my article next month where we will look at more life changes such as starting your family, sending the kids to college, and protecting your retirement assets.  Of course, any time you have a question or concern about your insurance, call our office at 978-352-8000 and we will give you our expert advice.

 

Image courtesy of David Castillo Dominici/FreeDigitalPhoto.com

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