The Best Time to Start a Financial Plan is Now
by Tricia Bush, CPA, CFP® Owner, AAA Advisory LLC
Is Your Insurance Still working for you?
If you’re like most people, you buy insurance with good intentions and then don’t think about it again unless your premium changes or something goes wrong. That’s understandable. Insurance is one of those things we hope we never really need, so it tends to sit quietly in the background until the day it has to do its job. The problem is that life does not sit still: your home value changes, your car ages, your family grows, your income changes, and your nest egg may look very different than it did when you first signed up for the policy. That means the coverage you bought a few years ago may not fit your life nearly as well as you think.
For most households, the main policies to review are homeowners or renters insurance, auto insurance, health insurance, disability insurance, life insurance, and umbrella insurance. Together, those policies are the basic safety net for your home, your belongings, your income, and your liability exposure.
You do not necessarily need to overhaul everything every year. But a yearly checkup can help you make sure the coverage still matches your actual situation, not the version of your life from three or five years ago.
The Obvious Problem: Paying Too Much
Let’s start with the most obvious issue: nobody wants to overpay for insurance.
Sometimes that happens because you are carrying coverage you no longer need. Maybe your car is older than it used to be. Maybe your deductible is too low. Maybe you are still paying for add-ons or limits that made sense when your situation was different. And sometimes the issue is even simpler: different insurance companies price the same coverage differently, so a policy that looked fine a few years ago may no longer be the best value.
That is why it can pay to compare. If you never revisit your policy, you could keep spending more than necessary just because you stayed put.
The Bigger Problem: Coverage Gaps
This is where insurance can get tricky. A policy can look fine on paper and still fail you when you actually need it.
Maybe your home would cost more to rebuild than your policy would pay. Maybe you started renting out part of your home, added a teen driver, picked up a boat, or started a side business and never updated the coverage. Maybe your income or assets have grown, which means the stakes are higher if you ever face a claim.
That is why a coverage review matters. It is not just about saving money. It is about making sure the policy still works when life gets messy.
The One People Forget
One of the most commonly missed policies is umbrella insurance.
If you have never heard of it, umbrella coverage is extra liability protection that sits on top of your auto, homeowners, or renters insurance. It helps protect you if a serious claim goes beyond the limits of your regular policy. In plain English, it is the policy that helps when the “what if” gets bigger than your standard coverage.
That matters because major claims can get expensive fast. A lawsuit, a serious car accident, or a large injury claim can easily exceed the limits of a basic policy. Umbrella coverage can be a smart, relatively low-cost way to add another layer of protection if you own a home, have savings, have future earning power, or simply have assets you want to protect.
One thing to watch: umbrella policies often require certain minimum limits on your home and auto policies first. So, even if you have umbrella coverage, it may not work the way you expect if your base coverage is too low.
When To Take Another Look
You should probably review your coverage any time life changes in a meaningful way. That includes getting married, having a baby, buying a home, refinancing, adding a driver, retiring, inheriting assets, or taking on a side business.
Even if nothing dramatic has happened, a yearly review is still smart. Policies renew. Prices change. Your financial picture shifts. And what felt appropriate last year may be outdated now.
A Simple Way To Do It
If it has been a while since you looked at your policies, start by pulling together your declarations pages and asking a few basic questions:
Am I paying for coverage I no longer need?
Has my life changed enough that this policy should change too?
Do I have enough liability protection?
Do I have umbrella coverage, and if so, is it actually set up correctly?
That is usually enough to uncover whether you are in good shape or whether a few adjustments would help.
Insurance is not the most exciting part of financial planning, but it is one of the easiest places to find hidden problems before they turn into expensive ones. A quick review now can save money, reduce stress, and make sure the coverage you are paying for is actually there when you need it most.
If it has been a few years since you reviewed your policies, this may be a very good time to do it.
