As we welcome the New Year, many of us have already thought about the best way to start 2024 on the right foot. Whether you’re mulling over common resolutions like exercising more, eating out less or spending more quality time with the people that matter most, you shouldn’t overlook one crucial aspect of your life — your insurance policies.

While double-checking your insurance coverage might not be as exciting as the new workout class you’re considering, it is a responsible financial practice you should maintain every year to ensure your evolving insurance needs are met. Here’s a checklist of the things you should consider in the new year:

Update Your Personal Information

Did you move this year or celebrate a new addition to your family? Significant life changes, also known as qualifying life events, can necessitate changes to your insurance policies. Here are some of the basic types of life events that could impact your insurance coverages:

  • Making a big purchase – Did you treat yourself with an expensive purchase in the past year? Acquiring significant assets, such as fine jewelry, art or antiques can be an exciting time in your life. Just don’t forget to keep your insurance advisor in the loop. These items should be included in your policy so you can recoup your losses in the event they are lost, stolen or destroyed.
  • Changes in household size – Getting married or divorced, welcoming a child into your home or experiencing a death in the family can all require adjustments to your insurance. Remaining on top of these changes is essential in protecting your loved ones.
  • Relocating or moving – Moving to a different ZIP code or county could impact your insurance even if you stay in the same state. The same goes for situations where a student moves for school or a seasonal worker moves many times throughout the year for employment opportunities.

As you progress through life, your insurance needs will change. Remaining aware of how your personal life can impact your insurance coverage — whether by welcoming a new addition to the family, hitting a milestone age or moving halfway across the country — and keeping your insurance agent in the loop are great ways to avoid the headaches associated with gaps in insurance coverage.

Review Your Policy Documents

Keeping your coverage up to date and in line with your current and anticipated needs can help you enjoy a stress-free start to your year. When reviewing your policy documents for your home, auto or health insurance, consider whether you’ve made any significant changes to your life or assets. Accounting for all the changes in your past year and those you’re expecting in the next will help you stay organized and make reviewing your coverage levels easier. This is an important exercise to avoid becoming underinsured, a costly issue that can arise when a person has an insurance policy but does not have enough coverage to pay the total cost of the claim.

If you’ve done any of these or similar things during the past year, you may need to reevaluate your current insurance coverage:

  • Your household driving habits have changed – A young or new driver hitting the open road is a time for celebration. It's also the perfect time to up your coverage. The cost of repairing fender benders, dings and scratches can rack up quickly, costing you money if there's a gap in your insurance coverage.

    Conversely, if you're spending less time on the road — whether because of a New Year's resolution to find ways to incorporate public transportation into your daily routine or you've started working a new job from home — a low-mileage policy might better serve you. Many carriers offer low-mileage policies or discounts that offer a set percentage off the cost of a traditional policy.

    If one of your resolutions is to save money in the upcoming year, try participating in a nationally recognized safe or defensive driving course for a discount on your car insurance, like those offered by AAA or AARP. Depending on how many years it's been since you completed your road test, these convenient courses can get you up-to-speed on changes to driving laws, help you sharpen your skills behind the wheel and give you essential reminders of safe driving practices. Successful program completion can net you a discount on your insurance or reduce points on your driving record. However, rules by state can vary, so check with your insurance carrier or local Department of Motor Vehicles to determine if you're eligible.

  • You received a major gift – Did a family member surprise you with the centerpiece to your ongoing collection this holiday season? Whether you’re a votary of vino, a champion of fine China or a life-long groupie of your favorite rock band, your prized collection needs a place of honor in your home and on your insurance policies.

    You might assume your homeowners insurance can help if your treasured items are damaged due to a fire or burst pipe, but most homeowners insurance policies actually limit or exclude coverage for artwork and other collectibles, according to Investopedia. If you've been working on your collection for years, or it contains heirloom pieces that have finally made their way to you, now's the time to secure a policy for these items.

    Because the holiday season is often associated with gift-giving, the new year is an optimal time to conduct a yearly home inventory. This practice is vital in ensuring all your high-value possessions, such as art, jewelry and instruments, are documented for insurance coverage. Failing to do so can bring your ownership of the items into question, resulting in your claim being denied in the event of loss. When conducting your inventory, start by taking photos in each room of your house, including any new big-ticket items or changes in existing ones. Keeping copies of receipts for such things can also be helpful.

  • You invested in your home – A home renovation project like a new in-ground pool, a remodeled guest room or a kitchen upgrade can make your home an enjoyable and exciting gathering place for your family and friends. However, any of these upgrades and many other common home renovation projects can affect how much your home is worth. All homeowners insurance is calculated to estimate your home's rebuild cost, establishing a limit that your insurance company will pay to repair or rebuild your home following a loss caused by covered events like fire, windstorms, hail or lightning.

    If you’ve made changes to your home that will impact that rebuild value — such as adding a new addition or detached garage — it’s essential to keep your insurance carrier informed. If they don’t know about your improvements, you could find yourself becoming underinsured if the cost to repair the damage is higher than your current limits. It's also advisable to check in with your insurance advisor before your project starts to ensure you have the coverage you need by the time construction is complete; working collaboratively with your advisor can also help you decrease your chance of loss during and after the project.

    Additionally, upgrades and home additions — like pools, hot tubs and trampolines — can be liability risks. If you've installed one over the past year or are considering one, read on to discover how umbrella insurance can help reduce your risk.

Consider Umbrella Insurance

If you have acquired significant assets or experienced lifestyle changes, umbrella insurance might be right for you. To understand how umbrella insurance works, consider how you use an umbrella in your everyday life. During a sprinkle, you might throw on a raincoat and call it a day, confident that your clothes and personal belongings are safe. But in a proper downpour, where even walking to your car can get you soaked, an umbrella is a necessity.

Umbrella insurance works the same way, providing extra coverage beyond the limits of your other policies or for claims those policies might not cover. It can also help protect your assets if you're sued and cover legal expenses beyond the limits of your other policies.

Consider getting umbrella insurance if you’ve done any of the following in the past year:

  • Installed a new pool or trampoline where people could get hurt
  • Welcomed a young or new driver to your household
  • Participated in sports or activities on your property that could cause an accident or injuries
  • Frequently hosted parties or had guests on your property

Bundle Your Policies

When your insurance policy renewal reminders hit your inbox every year, do you mindlessly confirm the same tired policy without reviewing your options? If that sounds familiar, you could miss an excellent opportunity to save money. 

Many large insurance companies rely on their rates to attract budget-minded consumers, providing deals to those who will use their company for the three main types of insurance: home, auto and life. Not only can the multi-line discounts offered by these companies save you money, but they also save you time by simplifying your insurance review and renewal process every year. When changing your insurance policy, carefully review the coverage details to ensure your needs are met. 

Your insurance coverages provide important protection for you, your loved ones and your belongings should the unexpected occur. However, failing to account for life changes or events from the past year can leave you unknowingly underinsured and exposed to costly liability risks — staying proactive is key to maintaining comprehensive coverage. Therefore, contact your Gallagher personal insurance advisor to discuss any changes from the past year to determine whether you need to update your insurance coverage.