At the end of each year, there are several articles and blog posts published on end of year financial planning and moves to make. Some are written to address end of year tax moves you can take now, while others address items to rebalance your portfolio better, open an IRA, and improve your financial position now and in 2017.
I like reading these posts and articles, however there’s one more item I believe you should include with your end of year personal financial review, and that is to look over your insurance policies. An insurance review helps you determine whether you’re adequately covered and hopefully pay less than you did this year! So, get out your policies, flip to the declaration pages, and let’s see what we can accomplish in 30 minutes or less!
Home Insurance:
- If you added square footage, remodeled your kitchen, or created a master suite you may need to add the cost of your home improvement project to your home’s dwelling coverage to ensure you have enough insurance to replace your home.
- Did you update your wiring, HVAC system, or plumbing? What about replacing your roof? Updates can lower your annual premium (see https://wiseinsurancegroup.com/home-insurance-home-updates/_).
- Do you have or did you activate a monitored alarm system? It’s worth a discount!
- If you were being charged for a prior insurance claim that happened 3 or 5 years ago, point this out to your agent. It should lower your premium depending on how long your company looks at them and when it “rolls off.”
- For individuals who work from a home office, determine how much you paid for home insurance for the year. You’ll need this for taxes.
- If you bought a home in 2016, remember to file your Texas Homestead Exemption with your county tax office in January. If you never filed your Homestead Exemption, do so now! This won’t save you anything on your home insurance, but it will lower your property taxes!
Car Insurance:
- Did you buy a new car this year? Review at the uninsured / under insured motorist property damage coverage. It needs to be enough to cover your loan amount should you be involved in an accident and the car is considered a total loss.
- If you drive an older car and there’s no loan, it may be time to remove the collision deductible and move to liability coverage (see https://wiseinsurancegroup.com/when-should-you-drop-full-coverage-car-insurance/), which provides a nice savings. Before doing so, determine what your car’s trade in or sales value is and if it’s worth it to maintain full coverage.
- Has your income increased? You may need to increase the limits on your liability coverage to better protect yourself financially (see https://wiseinsurancegroup.com/how-much-car-insurance-do-you-need/).
- Determine how much you’ve paid for car insurance for all of 2016 if you itemize your deductions on your tax return.
Life Insurance:
- If you got married, had or adopted a child, divorced, or had some other life event, review the amount of life insurance you have to confirm there’s enough to take care of your survivors (see https://wiseinsurancegroup.com/shopping-for-life-insurance-answer-3-questions-first/).
- If the only life insurance you have is through your employer, consider getting your own so you have coverage whether you’re employed or find yourself searching for a job.
- Review the beneficiary information to determine if it needs updating.
- File it in a place where your spouse, partner, and survivors know where it is. Include contact information for the company and your agent too!
Health Insurance:
- For people with an individual health insurance policy, review your coverage and deductibles to determine if any changes are needed.
- Self-employed individuals with a health savings account should confirm they’ve contributed the maximum amount before year’s end as it may help reduce your taxes.
- If you turn 65 in the coming year, it’s time to get educated on filing for Medicare, as well as the optional supplemental plans. A great source of information is http://www.medicare.gov/.
The foundational principal is take time to review your coverage once a year. Most people don’t and that’s one reason they find out they aren’t covered as they imagined or are paying too much. Share your thoughts, questions, and suggestions with me by email or on our Facebook, Google +, and LinkedIn pages. I’d love to hear from you!
