6 New Years Resolutions to Improve Your Insurance Coverage in 2014

By on January 7, 2014

Losing weight and saving money are still two of America’s most popular New Year’s resolutions, however the vagueness of these goal often means exercise equipment will be gathering dust in basements by Valentine’s Day and that spare change jar is forgotten on the back counter by April.

This year, why don’t you make a resolution with explicit goals and objectives which will save you money, improve your health and even protect the financial safety net you worked so hard to build. Resolve to be more knowledgeable and prudent about insurance in 2014; spend wisely, save and still get the coverage that matters most.

Your insurance needs will change from year to year and insurance industry requirements can evolve (as the current health care reforms have taught us). The last thing you want is to learn that you do not have enough coverage to handle emergency expenses, claims or premium increases; or that you’re overpaying for coverage you no longer need. Start each year by taking stock of your auto, home, life, health and other insurance policies.

Here are six ways to be smarter about your insurance protections and fine-tune your coverage in 2014:

1 — Quit Smoking or Lose weight to Save on Life Insurance or Health Coverage

As you launch into a new year, look for ways to cut insurance costs. If you’re among the two-thirds of Americans who are overweight or obese, losing weight or quitting smoking could qualify you for lower life insurance rates or save you money on health care expenses now (and in the future).

Smoking dramatically increases the cost of insurance. If you live a healthy lifestyle and are in good shape you are less likely to file a claim for health or life insurance, hence, less of a risk to insurance companies. Some insurers will offer preferred life insurance rates for healthy individuals with dependents to support or assets to protect. And for healthy, young people who rarely go to the doctor, it may make sense to seek lower health premiums through a higher insurance deductible.

Most life insurance companies require you to be tobacco-free for at least 12 months to qualify as a nonsmoker, however some may offer incentives programs. Ask your insurance agent for details about how quitting smoking or shedding some excess weight can save you money since not all insurance companies allow existing policyholders to apply for better rates.

2 — Take an Inventory of Your Home Assets to Update Your Homeowners Insurance

The start of a new year is also a good time to get ready for spring cleaning and take stock of all your valuables and possessions. You will need an accurate inventory if you ever have to make a homeowners insurance claim for items lost, stolen or damaged. Use your smartphone or tablet to take pictures of each item or take a video recording of your home. Give your insurance agent a copy of the inventory and keep a copy for yourself with your other emergency documents (in a fireproof security box.

If you got a valuable new flat screen TVs, tablet, smartphone or that special professional chef range you’ve always wanted over the holidays, you will definitely want to protect them under your homeowners policy. Speak with your insurance agent to consider a special rider for cover expensive items which exceed the limits of your home policy.

3 — Protect Your Home, Finances and Personal Information

2013 certainly taught us that your personal information and consumer transactions are never 100% secure. Neither is your home ever 100% safe from the threat of theft, natural disasters or accidents. Here are a few security measures for protecting your home, identity and assets:

  • Install deadbolts on doors and locks on windows
  • Install a home security system (some now have apps you can integrate with your mobile devices to monitor your home security remotely)
  • Upgrade fire safety measures (alarm, sprinkler systems, fireproof roof shingles, etc.)
  • Upgrade your computer and internet security software
  • Get alerts for unauthorized charges on your credit cards or bank accounts

Ask your insurance agent about discounts for using these personal security measures. And consider additional coverage for identity theft so you are not stuck footing the bill for someone else’s fraudulent purchases.

4 — Improve Your Credit to Save on Premiums

Insurance companies may use credit information as a factor in determining your insurance premiums*. People with good credit might qualify for lower rates than those with a poor credit score.

Attain a copy of your credit report, then correct any factual errors, reduce your use of credit to below 30% of your total limit and continue to pay your bills on time.

*Not all states allow the use of credit history information when setting insurance rates. Ask your insurance agent for rules and regulations.

5 — Refrain From Talking or Text on Your Cellphone While Driving

Save money on your auto insurance by pledging to Observe the Law Behind the Wheel in 2014. Accidents and traffic tickets rack up points on your licence and increase your insurance premiums. Refrain from using the phone while driving, even if you use hands-free apps your driving is distracted.
Many states already restrict the use of phones while driving. Regardless of what the laws are in your state, it is best to stay focused on the road; and NEVER text while driving.

By choosing to stop using the phone while driving as one of your New Year’s resolutions, you will be a leading example to your family members and friends to recognize their own level of distraction and improve their own habits.

6 — Review Your Insurance Policies with Your Agent to Fill Any Gaps or Shed Excess Coverage and Save

Floods and Earthquake Insurance of Individuals and Businesses

Assessing your need for a special insurance should be high on your list of New Year’s resolutions, too. With Superstorm Sandy, flooding in Boulder, Colorado and massive wildfires all over the western US this past year, you should resolve to fill gaps in your property insurance.

Many homeowners and businesses are at-risk for widespread flood and earthquake damage yet lack the proper insurance to cover the cost of replacing personal items, paying for temporary housing or assistance and/or rebuilding their property.

You cannot assume federal aid will bail you out after a natural disaster. If you are not in a declared disaster area, you may be on your own for repairs and expenses. Speak with your insurance agent about natural disaster policies and umbrella policies for extended coverage.

Audit Your Life Insurance Coverage

Life insurance can help replace lost income and pay for final costs in the event you passed away. Your life insurance needs will also continue to change as you age, get married, have children, pay off mortgages or make career changes. Give some thought as to how much protection you need and compare it to the coverage you currently have in place.

Consider whether you need more or less life insurance, and whether your needs would be better satisfied by term life or permanent life insurance (whole and universal life). This will depend on the number of dependents you financially support, the total value of your estate, tax implications, policy fees and several other factors.

If you are the sole wage-earner in the household with a nonworking spouse or domestic partner, you may want to ensure they have adequate life insurance coverage as well. While they may not have any income, they bring great value to a home doing domestic duties that you may have to pay for if you suddenly lost them.

Take an Active Role in the Protection of your Life, Home and Estate

New Year’s is a time to improving personal habits and sustaining changes which help you succeed. Commit to resolutions for making smart insurance choices which will save you money and support you when you need protection most.

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About Scott Ho

FSN insurance and retirement journalist - Planning for your retirement or understanding your insurance needs can be confusing and difficulty. Scott knows these tasks can seem daunting. He offers his experience to make choosing insurance coverage and planning for your golden years a successful endeavor. Connect with Scott at !

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