With economy down, it’s a great time for a personal insurance review

The stock market has sank 40% in the past year, your 401K has probably fell a similar amount. You hear about how bad things are every day in the news, but one positive thing you can do to help your personal financial situation is to review your home and auto insurance coverages. There isn’t much you can do to bring the markets back, but you can make sure you have adequate coverages at the lowest rates available on your home insurance and car insurance policies.

People have a tendency to put off the occassional financial tuneup, thinking their coverages are adequate. But with increases in construction costs over the last few years, your home may be underinsured and you may not know it. It’s important to recalculate the replacement cost of your home every few years. Your home insurance policy may have an annual cost of living increase, which bumps up your home’s insured value automatically. If it doesn’t, however, then you need to make the adjustment yourself by increasing the insured value by an amount you are comfortable with. You agent or insurance company can help you calculate the replacement cost of your home using sophisticated replacement cost software that is continuously updated by the software provider.

You auto insurance policy needs an occassional check-up just as your home insurance policy. You don’t need to adjust the insured value of your vehicles, as they are valued on an actual cash value method rather than a replacement cost method. But you can adjust your physical damage deductibles, liability limits and optional coverages to reflect any changes over the last few policy terms.

If you drive vehicles that are getting older, you may consider dropping full coverage and just carry liability insurance on those vehicles. Just make sure you have adequate financial resources to be able to absorb the total loss of the vehicle if in an accident. Also take a look at raising your comprehensive and collision deductibles to save more money on your car insurance bill. Taking your deductibles from $250 to $500 or more can save a significant amount on your renewal bill.

Are you carrying optional coverages on your car insurance policy such as towing, roadside assistance, custom equipment or rental reimbursement? These are coverages that you may not need but are paying a premium each month to have them. Also make sure you are not paying for duplicate coverage that may be available elsewhere. If you have a motorclub membership such as with AAA, you would not need to pay for towing or roadside assistance coverage on your car insurance policy.

The economy is in a constant state of flux as we start 2009. It will improve, and it will take time, but nobody knows exactly how long it will take. By taking the time to perform a personal insurance review of your car insurance, home insurance, life and health insurance and personal umbrella coverage. You may be able to save substantial premium on your coverages without making any major coverage changes, simply by shopping your insurance around and finding the lowest rates.