Questions to Ask Before Renewal - Personal Auto Edition
There are tons of confusing things about insurance, including how to handle renewals. A renewal is just the ending of one term and then the beginning of the next. But what makes them special and what should we do about them?
1. How much is my renewal and why?
Many people make the mistake of signing a renewal application without checking it over, assuming it will be just the same as last year. This is not always the case. It is very important to always check coverages to make sure they match what you need, and to see if you qualify for any new discounts. If the premium, or cost of the policy, has gone down, it may be because you had no claims, violations, or convictions and the carrier now sees you as less of a risk. Lower isn't always better though; if you think it's too good to be true, make sure all your vehicles and drivers were listed and the coverages you need are applied. If it went up, it could be due to things like claims, but it could also be a flat rate increase by the carrier. Ask your agent about any discrepancies when the price is higher or lower than you expect.
2. What coverages do I have?
Sometimes knowing what coverages you have, and exactly what they mean, can be overwhelming. While knowing what the terminology means (see a previous post here that helps explain some common terms) can certainly help, it can still be difficult to determine what you have versus what you need. A lot of factors may affect this, including things like what and where you drive, or whether you own, lease, or have financed your vehicle. Most lenders and leasers require "full coverage," meaning you have to carry coverages such as physical damage as well as at least the state minimums for liability. Ask your agent what coverages you may be required to have in your state and discuss whether the minimum is really enough. The minimum isn't always adequate coverage though - which brings us to the next question.
3. What coverages do I need?
While an agent cannot explicitly tell you, "Here's what you need and how much you need to be covered," they can help you decide what suits your needs by describing the benefits and costs of certain coverages and limits. Each coverage likely will have different limits, meaning how much the maximum dollar amount the policy will pay for a claim is. Depending on your policy, there may be certain inclusions or exclusions as well, which are important to consider when purchasing or renewing.
4. What is an exclusion, and do I have any?
An exclusion is something written into the policy contract that the insurance carrier is explicitly saying they will not cover. For example, if you live in a seacoast town prone to hurricanes, it is very possible that your insurance may exclude wind damages. But fret not, these exclusions can often be added into your coverages by endorsements for an additional premium. To ensure you have adequate coverage, review your exclusions with your agent and purchase additional coverage where necessary.
5. Did I complete everything for my renewal?
One other vital mistake that is often made is not completing the renewal requirements in a timely manner. While renewals are not typically as strenuous as the initial term, you still have some tasks like signing your renewal application and paying your down payment or premiums. For many carriers, this process will begin about 30 days before you are set to renew. This gives ample time to complete tasks and arrange payments so that when renewal day comes, everything is smooth sailing. It is critical to utilize your agent as a resource during renewal to ensure you do not have any lapse in coverage!
Ready for your free, no-obligation quote? Call or click today to get started, and one of our friendly agents will contact you shortly.