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How do you know you’re underinsured?

SmartInsure

As you move from one life-stage to the next, your family will grow, your home may change, and perhaps you’ll get a new car. But what does this mean for your insurance?

One of the consequences of an ever-changing life is that you may find yourself underinsured. This is when the insurance you have on your life or your assets does not match your current life circumstances.

To find out whether you’re underinsured, go through the following checklist and be honest with yourself about the changes you’ve experienced in the last year:

● Has your family grown or downsized in the last year?

● Has your relationship status changed?

● Have you moved or renovated your home?

● Have you recently upgraded or sold your car?

● Have you incurred any new debt in the last year?

If you’ve answered yes to any of the above questions, you may be underinsured. Luckily, this is can be solved by getting in touch with your current insurer or taking out additional insurance with a new service provider.


Triple the lives to cover?

If you have life cover, you will assign a beneficiary to that policy. If it’s just you and your partner, you will take out a life cover policy that will be able to support them if anything were to happen to you, and cover any of your outstanding debt so that it doesn’t fall on them.

However, if your family has grown recently, your life policy may not be enough to take care of your partner and children if something were to happen to you. It’s therefore important to reassess your life cover when your family grows or downsizes.

Similarly, if your relationship status changes or your parents become dependent on you, you should also reconsider your life cover.


Double the assets to cover?

You may also have renovated your home, which could have increased the cost of fixing any damage. This means that in the event of a fire or natural disaster, your insurance may not be able to cover the cost of the damages.

Similarly, if you purchase several new appliances or furniture, your initial home contents insurance may not cover you in full if your home experiences any damage.

It’s therefore necessary to reassess your insurance policies when your home changes or the contents within your home change.

Ultimately, if you experience any large life changes, you should get in touch with your insurer and make sure that your cover is up to date with where you are in your life.


 

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