New year offers chance to adjust insurance

This was originally published on Monday, December 15, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

There are just a few more weeks before the New Year. There may be many items on your holiday to-do list, but have you set some time aside to review your financial status? Reviewing your financial status will help you know where your finances need tweaking for the upcoming year. Your insurance policies should be on your end-of-the year review checklist. Last week, I covered some points to look at when reviewing your life and car insurances. Here are other insurance policies to review:

Homeowners insurance
• Do you have enough coverage to fully replace your home? Inflation can cause gaps in the price to rebuild your home. For example, if you purchased and covered your home at $250,000, it may now cost you $400,000 to rebuild your home. You will not have enough insurance to rebuild your home.

• Have you made upgrades to your home? If you made upgrades to your home, such as an extension, a pool or remodeled your kitchen, you may want to get your house re-evaluated. Making upgrades to your home will cause the value of your home to increase. You want to ensure that you are covered for the full price of your home.

• Do you need special coverage for certain items in your home? Did you recently purchase expensive jewelry, art pieces or new electronics? Do you have antique furniture or items? The value of what is in our home is just as important as the value as your home. Check with your agent/broker if any of your high-valued items need extended coverage. After assessing your home, you may need to increase the coverage for your possessions.

• Did you add a home security system? Did you install typhoon shutters or anti-theft grills on your windows? Adding these items to your home may give you an added discount.

• What perils does your policy cover? Know what perils are listed on you policy. It may include theft or fire. Does your insurance cover earthquakes, floods or typhoon? If not, you may need to buy extended coverage.

• Do you rent instead of own? Just as homeowners need insurance so do those who rent their home or apartment. Many people feel that their landlord’s insurance will cover them. In actuality, a landlord’s insurance will cover only the dwelling and any accidents around the property. It will not include your possessions. Renter’s insurance will cover your possessions in case of theft and fire. Talk to your insurance agent/broker.

Health insurance
• Were there any changes in your household? Did you welcome a new baby in your household? Did you have a child become of age? Did you get a divorce?

• What does your plan cover? Review your summary of benefits and coverage. Are you covered for ER visits, urgent care, immunizations, maternity, laboratory testing or prescription medications? How much is your co-payment?

• How much are you paying? If you pay a higher premium upfront, most likely you will pay less when you need medical attention. If you have extensive medical conditions, you may want to consider a plan with a higher premium that will cover more of your treatments. If you are in good health, consider a lower premium plan, but not too low in case of an emergency or unforeseen illness.

• Who is in your network of providers? Does your insurance cover the doctors or hospitals/clinics that you want to see? Does your health insurance cover off-island treatment?

Insurance is something we must have but the coverage we choose depends on income, lifestyle and life situations. As we change, our insurance policies will have to change with us. An end-of-the-year review of insurance policies will ensure that your needs are covered to have a healthy and prosperous new year.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.

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