You are sitting in your Lazy Boy lounge chair looking through your mail after work, or your significant other calls you on your cell and yells at you about the increase in the cost of auto and home insurance.
What do you do? Curse at the dog? Go buy a couple of packs of hot dogs for dinner instead of steak? Insurance costs are increasing for property and casualty products.
That is not to say that health insurance premiums aren’t going up even more. With restricted health insurance markets, until sanity is restored to the market place, your choices are limited. That is not the case with home and auto insurance.
There are many carriers out there eager for your business. It only requires some knowledge and initiative on your part to get the correct coverage at the lowest cost.
You start by reviewing your coverage and talking to your insurance agent or company to make sure you have the correct coverage. Do not do a knee jerk reaction and start reducing or deleting coverage without understanding the risk and the cost. A licensed agent can walk you through the coverage and limits and make recommendations that may save you money.
Starting with home insurance, most of the coverage other than personal liability and medical payments are keyed off of the replacement cost of the home. If you have had the same policy with the same company for more than five years, you may want your agent/company to do a current home cost replacement evaluation.
When the homeowners policy was first issued an evaluation was done, but most companies include an inflation factor that increases the dwelling value 3 percent-5 percent a year. After five or 10 years, that cost may be significantly higher than the current cost to replace your home.
Also, you might want to increase the deductible on your home policy. Increasing your deductible from $1,000 to $2,500 might be well worth it. Most companies do not like insureds submitting small claims anyway.
On your auto policy, you might have a vehicle that was financed when you first got the policy and included comprehensive and collision coverage. That may have been 10 years ago, and the car is now paid off. You now should weigh the value of retaining that coverage or deleting it from the policy. That is your decision.
While the cost of these coverages reduce as the vehicle ages, so does the replacement value from the insurance company. A vehicle now worth $5,000 probably would be totaled if the damage was $3,500 or more. Certainly if that was the case you could elect to repair or not repair the damage, but you then would revert to a salvage title and not be able to cover the vehicle for comprehensive and collision, since you already collected for the value of the vehicle.
Dave Pushman is the former regional vice president of Geico in Macon and is now an independent insurance agent with Tidwell and Hilburn Insurance. He can be reached at firstname.lastname@example.org.