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Insurance Tips for a Safe & Smart New Year, Part II

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Earlier this month, we discussed one new year's resolution that can help you find peace of mind: make January the time to review and update your insurance policies.

In this podcast episode, we team up with Gary Pozsik of Health, Wealth, and Happiness and discuss our final tips for evaluating your insurance policies to ensure a smart start to the new year.

Show highlights

1. Revisit your beneficiaries.

Selecting beneficiaries for your financial accounts and life insurance policies is not a one-time process. You should review your insurance policies annually and especially after major life events.

Life events such as marriage, having children, getting divorced, taking on new debts, or changes in your wealth should prompt you to update your policy.

2. Make sure you have flood insurance.

According to FEMA, 90 percent of major natural disasters in the U.S. involve flooding. Unfortunately, homeowners and renters insurance do not cover flood damage, including water from a storm surge.

Federal flood insurance, purchased through your insurance agent or company, is the only guaranteed flood insurance coverage available for your home.

Here's what flood insurance typically covers:

  • Contents: Flood insurance pays actual cash value for the cost to replace the damaged or lost property based on its current value.
  • Property: You can opt for replacement cost coverage for your primary residence, which pays based on the cost to replace the damaged or lost property with new property.

3. Don't ignore disability insurance coverage.

According to the Council for Disability Awareness, one in three women and one in four men will have a disability that keeps them out of work for 90+ days at some point during their working lifetime. However, less than half of working Americans do not have disability insurance.

Long-term disability insurance typically kicks in after you've been out of work for an extended period of time, such as 180 days. LTD insurance can be acquired through a private insurance company or through a company-sponsored plan.

Long term disability insurance policies will typically pay between 40% to 60% of your pre-disability gross salary. These benefits are paid for a specific period of years or until age 65.

Learn what questions to ask before buying disability insurance.

4. Brush up on available discounts.

Do you know what discounts your insurance company offers? Ask about newly added discounts you might now qualify for, such as:

Auto insurance

  • Belonging to professional associations/organizations
  • Multi-vehicle discount
  • Good student discount
  • Safe driver discount
  • Loyalty discount
  • Resident/faraway student discount

Homeowners insurance

  • New wiring
  • Impact-resistant roofing
  • New home or renovation credits
  • High-tech gas and water sensors

Insurance companies may provide different forms of savings; talk to your trusted insurance agent or broker to confirm how to qualify for these discounts. 

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