Flowers are trying to poke through the ground and birds seem to chirp more than usual — Are you feeling the pull of spring? For many, March is a traditional month for “spring cleaning” — Purging old items from years past, discarding broken or unnecessary things from your home and giving everything a deep once-over. Turns out, March is also a perfect time to “spring clean” your insurance coverage:
1. Do a basic review of your policies: This applies to all your business coverages but also personal too. Pull out actual copies of your policies to see first and foremost what you already have and flag any areas that have changed over the last year — Have you added more square footage to a facility? Have you increased or decreased your staff? These are things your broker needs to know to adjust coverage appropriately.
2. Reality check on coverage limits: Too often people set an insurance policy in place with coverages for various needs (theft, loss, fire, etc.) and then leave the coverage limits on auto pilot. This can be especially true when it comes to construction costs for your home or business. An average rebuilding cost may have been $150/square foot when you first set your policies, but have you reviewed with your broker if those amounts are still realistic based on market demand and resources? Your broker is up to date on the true cost to rebuild and can help guide you to a more accurate figure so you are not stunned later.
3. Be sure special equipment or assets are sufficiently covered: Both business and personal homeowner’s insurance policies have exclusions for various property categories. You may think your engagement ring or custom die-cut machine are covered, but are they? Make sure your policies have specific riders where required for specialty items.
4. Do you need an umbrella policy?: It’s fitting that spring is the time of showers — makes it a perfect time to review an umbrella policy. Much like its real-world counterpart, an ‘umbrella’ policy can provide overarching coverage from multiple liabilities, further protecting your assets. Spring is a good time to review your need for this coverage and also evaluate your limits based on your assets.
5. Examine your deductibles: Deductible review is a great way to lower your premium costs whether for business or personal/auto insurance. Go over the deductible for each policy and determine your comfort level with each — Would it be a large financial strain to come up with a big out of pocket cost for a claim? Consider lowering the deductible. It will cost you more in monthly premiums but determine if that is more financially manageable for you and your business versus a big expense to meet a deductible threshold. The same holds true in reverse: If you are looking to lower monthly expenses and are comfortable with a potentially larger deductible threshold, consider raising the deductible to improve monthly cash flow.
6. Don’t forget to document: Any policy is only as good as the percent of losses it protects. To make sure you get reimbursed for your true losses, spring is a great time to update inventory videos or photos of your home or business. A few minutes spent walking through an area with a simple phone video camera can remove hours of hassle down the road when filing a claim and attempting to prove your losses!
