American Property Casualty Insurance Association
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Jeffrey Brewer







January 13, 2014

PCI Urges Consumers to Conduct Annual Insurance Review


WASHINGTON DC – January is an excellent time to review your automobile, homeowners or commercial insurance policy to make sure you are ready for whatever the new year may bring, according to the Property Casualty Insurers Association of America (PCI).

“Homeowners and businesses can sustain significant property damage and have their financial lives changed in a moment whether it is from a natural disaster and unexpected emergency,” said Micaela Isler, assistant vice president for the PCI. “However, your insurance company is there to help you recover from these potential disasters. Fortunately there are several things you can do before disaster strikes to make sure you’re prepared and we encourage homeowners, renters, and businesses to start with a yearly review of their insurance policies.”

Over the course of a year an individual or business may have made upgrades, completed renovations or purchased new items that could impact the amount of insurance coverage that is needed. Conducting an annual review of your insurance policies helps to ensure that your home or business is fully protected. The review provides you with the opportunity to address potential gaps in coverage. Additionally it enables you to talk with your insurance company or agent, ask questions and gain a better understanding regarding your coverage. You may be pleasantly surprised that it is fairly quick and easy to conduct the annual review.

For Homeowners:

1.         Begin the process by doing a home inventory of your possessions. Your insurer may have tools available to assist you in creating your home inventory. Additionally, there are other resources you can use such as the Insurance Information Institute’s Know Your Stuff Home Inventory.

2.         Next call your agent or insurance company to discuss your policy and coverage options. They can assist you in determining the type of policy you should have and the proper amount of coverage.

3.         Check whether the policy pays replacement cost or actual cash value for a covered loss. Actual cash value takes depreciation into account. As a result, the compensation received may be much lower than the retail price of a new item. Your policy should insure the structure for the full replacement cost. The replacement cost is the amount necessary to rebuild the home with construction materials of like kind and quality. Replacement cost should not be confused with market value, which is the price you could sell your home for today. In some areas, new building codes will increase the cost of rebuilding. These factors should be considered in the decision regarding how much insurance to buy. Contact your agent to adjust the amount of coverage if you’ve put on an addition or made renovations to your home.

4.         It is a good idea for people to buy flood insurance because flooding is the most common natural disaster. While flooding is not covered in standard homeowners insurance policies, it can be purchased through insurance agents from the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Administration.

5.         Make sure to know the amount of your deductibles. The deductible is the amount of a covered loss that the homeowner must pay. The higher the deductible, the lower the premium will be.

6.         Inquire about discounts that may be available. There may be discounts for things such as security systems, smoke alarms and steps you have taken to mitigate damage from natural disasters. Additionally some insurers offer discounts for consumers who purchase multiple policies.


For Businessowners:

1.         Don’t assume your insurance needs have not changed since last year or from the time you purchased the policy. Talk with your agent or insurance company about your business operations and if there have been changes in the types of products you manufacture, service or sell. These kinds of changes could impact your coverage.

2.         Consider what it would cost to replace your building as that figure can change significantly over time. Also consider if you have added new, moved or closed locations. These factors regarding your business property could affect your insurance.

3.         Think about changes in your employee headcount and the work they perform. The use of subcontractors or having employees work from home on a regular basis could have ramifications on workers compensation insurance.

4.         Talk to your agent or insurance company about additional coverage options such as loss of business income due to natural disaster or coverage for a data security breach. Each business is unique and your agent or insurance company can help you determine the right package of coverage for your operations.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.