Among the many things most of us weren’t thinking about in high school, insurance likely ranks pretty high. Eventually, as we transitioned out from under our parents’ roof and insurance policy, the need for some form of insurance finally comes into focus.
This begs the question: at what other points in our lives should we be taking a closer look at what kind of insurance we have and what it covers?
While talking with your insurance advisor is the best way to truly understand what policies you have and need for your personal situation, here are some general considerations for insurance needs along your life’s transitional stages.
Young Adults –Branching Out on Your Own
In the beginning, most young adults don’t have many assets to protect. Either as a new graduate or living on their own for the first time, there’s typically not a lot of financial wealth or accumulation of valuable property. Generally, young adults in their late teens and early twenties need auto and rental insurance, at the most. Of course, there are exceptions—if they’ve inherited assets, hit the jackpot as TikTok or YouTube stars, or they’re well on their way to becoming the next Elon Musk or Oprah, they should definitely seek advice from an insurance professional about protecting their assets.
Young Professionals and Couples—First-Time Homeowners
Whether it’s from increased income or a new marriage, many young professionals in their twenties and thirties start looking to invest in a home of their own. With a new house also comes new risks for property loss, damage or other liabilities, requiring a Homeowners insurance policy.
At the same time, it is important not to assume Homeowners policies cover everything on the property. Insurance advisors can provide more information about what a Homeowners policy does and doesn’t protect, so it’s important to ask. For example, certain valuables may need to be added (scheduled) on the policy to ensure full coverage in case of theft or damage, such as wedding rings, valuable art pieces and other items.
Becoming a homeowner is also a good time to consider the benefits of adding an Umbrella policy for extra protection, not only on what is now likely your largest asset—the home—but also bank accounts, vehicles, and other assets. An Umbrella policy is coverage above and beyond your Homeowners insurance and offers additional loss protection from accidents or injuries, property damage, certain lawsuits and personal liability situations (see “new drivers in the home” below).
Middle-Age—Adding Wealth, Valuable Assets and New Drivers
As careers advance and adults move into middle age, wealth begins to build and we typically accumulate more “stuff” (aka, assets.) At this point, it’s a good idea to take another look at what insurance coverage exists to make sure high-value items are protected. Things commonly overlooked include artwork/fine art (including collectibles, statues, paintings, ceramics), jewelry, off-road vehicles, bicycles, etc. (See list under “Things That Make You Go “Hmmmm”.) In general, any time something of significant value is purchased, put a call into your insurance advisor on whether the items should be individually scheduled on the policy.
Have a new teenage driver? That’s also the time to consider an Umbrella policy. While auto policies will cover minor accidents, if a new driver causes a significant accident resulting in major bodily injury or death, an Umbrella policy will protect against serious financial losses from claims and some lawsuits if damage exceeds all other coverage, potentially saving real estate properties, vehicles and bank accounts.
Seniors—Big Bank Accounts, Downsizing, Retirement Living
Ironically, as we move into our senior years, we start thinking about getting rid of all the stuff we so eagerly accumulated as younger adults. If seniors choose to stay in their homes, they may need to add assets or remove them from policies, depending on whether they keep accumulating or they begin downsizing. If the home is sold in order to rent from a retirement community, renter’s insurance will be needed, along with scheduled items. For example, we had a client in a nursing home who couldn’t find his hearing aids. Turns out another resident thought they were peanuts and ate them. Extreme? Yes. It’s also something we couldn’t make up—you just never know, and hearing aids aren’t cheap! (By the way, everyone was fine.)
Other Things That Make You Go “Hmmmm”
We see it all the time—people make exciting new purchases or embark on home improvements (roof replacements, added rooms) that they never think to tell us about. That’s why we like to remind our clients to give us a shout whenever a major purchase takes place or they begin home renovations.
Additional reasons to update your insurance advisor:
- New roof (this can sometimes earn you policy discounts when not the result of damage)
- Home additions, including add-ons, swimming pools, fences
- Valuable collectibles (trading cards, sports memorabilia, figurines, etc.)
- Lawn equipment (lawn tractors, machinery for acreages)
- Valuable bicycles
- Specialized tools for hobbies (not home businesses)
- Wedding rings/jewelry
- Inheritance
- Acquisition of vacant land or farmland
- Recreational/motorized vehicles
- Precious metals (silver, gold, etc.)
There are other situations to consider that could affect your insurance rate or coverage. In general, it’s always best to reach out to your financial advisor to review your policy as your life inevitably changes through the years.
