Does your insurance policy have your back?

Question

By Your West Valley

Just because you have insurance doesn’t mean you’re covered, caution AAA Insurance experts. The new year is a good time to check over your policies and make necessary tweaks to make sure you’re properly protected.

“It’s important not to get stale on your coverages,” said Brad Oltmans, vice president of insurance for AAA Arizona. “What was considered a great coverage 20 years ago probably has changed. Reviewing your various policies at least once a year will help make sure you’re adequately covered — and will help avoid any nasty surprises.”

For example, if your family has experienced a birth, death or divorce, it’s time to update your life insurance policy and possibly adjust coverage amounts. But every type of insurance policy should be reviewed — and some changes could even save you money.

As a full-service insurance agency, AAA insurance experts recommend dusting off the following types of policies and seeing if corrections are necessary:

• Car talk: As your car ages, you can decide the value of keeping both comprehensive and collision insurance, as well as look at upping your deductible. The lower the deductible, the higher the premium. And if you have loan-lease payoff coverage, make sure to save a few bucks and notify your insurance company once the vehicle is paid in full. Many drivers don’t carry enough liability insurance, according to AAA insurance experts. Ten or so years ago, $100,000 per person and $300,000 per accident was common, but with today’s costs, $250,000/$500,000 might be more prudent. If you cause a multicar accident or hit a Lamborghini, $300,000 is not much at all.

• House calls: Homeowner and renter insurance policyholders first should create an inventory of their possessions. The Insurance Information Institute offers a free app for iPhones and Androids to help you do that. The old-school way works, too, where you go room by room and catalog serial numbers, photograph items, get copies of appraisals and put together a detailed list of valuable items. Update the lists yearly, or when you receive expensive gifts or buy or sell something. If you own valuable items, such as artwork, jewelry, furs or collectibles, first get them appraised and ask your agent to separately schedule them. It costs a bit more, but if they’re stolen, you’ll receive the full value of the appraised item rather than the insurance company’s limit.

• Floods gated: Even dry states have flood issues. AAA Insurance experts estimated Phoenix had 4,000 claims for flood insurance in September 2014. Homeowners are required to buy flood insurance if their house sits on a flood plain and carries a mortgage. However, homes that are paid for, especially those located in a flood plain, should still carry flood insurance to potentially avoid having a paid-off, destroyed home. Also, homeowners whose properties are located near drainage canals or ditches might consider purchasing flood insurance even if it’s not required. It won’t be as expensive, and it will protect you, because flooding is not covered in any regular homeowner policy. For example, there have been cases where houses not in flood plains have been destroyed after walls have caved in from improper drainage.

• Open the umbrella: Many factors go into umbrella policies, so discuss whether you need one with your agent. An umbrella policy will kick in when your other coverages aren’t enough. For example, if someone climbs your fence to go swimming in your pool and drowns, you may be liable — even if you didn’t give permission to that person. Other examples where an umbrella policy could protect you are if you possess considerable net worth, are a parent to a teen driver or are yourself an older driver.

• Extra coverage: Sometimes mishaps occur that aren’t covered by insurance, such as when the refrigerator stops working or a pipe breaks. That’s where a home warranty comes in. A policy can cover appliances, plumbing, AC/heating, pool equipment and electrical problems. AAA sells home warranty policies online.

 

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