Evaluate the coverage you already have

Jan 5, 2005
Contributor: joel randon

Before buying new or additional coverage, review the coverage you already have. It's a good idea to sit down with your insurance agent or financial advisor to look over your auto policy. Talk about your current and future insurance needs. You may be able to increase your liability coverage or make limited changes to an existing policy if you find that the coverage you have is inadequate. On the other hand, there may be occasions when you need to purchase an entirely new policy.

The following is a list of some common events that should trigger a review of your personal auto policy:

Your annual policy is up for renewal: review it and make necessary changes. The day the quote from your current insurer comes (usually a month or so before your policy expires) is an ideal time to shop around and compare the rates of other insurers.
Your family status changes (married, divorced, kids): You may become more concerned about protecting assets after you get married, or you may wish to purchase more liability or collision coverage after your son or daughter gets a driver's license.
Your property increases in value: Your home is your most valuable asset. Without adequate auto liability protection, your home could be seized to pay a judgment against you.
Your net worth increases: As your net worth increases, you will have more assets (and more valuable assets) to protect. Also, wealthy people are sometimes targeted for lawsuits.
You buy a new (or additional) car: When you buy a car, you'll need to change your automobile policy to insure it. Take a few minutes to review your liability coverage under that policy, and make sure that your liability limits are still adequate.


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