Kids moving out? Before you start planning a vacation or home remodel, give your insurance agent or financial planner a call. Your insurance might need to be adjusted.
"The biggest mistake people make after the kids leave the house is not making changes to insurance," says Kimberly Lankford, author of "The Insurance Maze" and contributing editor for Kiplinger's Personal Finance magazine. "It's one of the key times to look at insurance."
As your lifestyle changes, it's smart not only to re-evaluate your coverage, but to shop around for the best deals.
"Some companies that give the best rates for families with kids may not offer the best rates for couples with no kids," Lankford says.
Auto insuranceIt's well-known that children drive up the cost of auto insurance. Adjusting your coverage will make it cheaper.
1. Ask for an age discount.
Combined with a safe driving record, you can get better rates for being an older driver. "As you become a more mature driver, there are more discounts available," says Roger Sevigny, the president of the National Association of Insurance Commissioners and the New Hampshire insurance commissioner. The magic period: between 55 and 70, he says.
2. Tell your agent you've retired (or are doing some telecommuting).
When you're not racking up commuter miles every day, your rates will likely go down, Sevigny says. The number of miles you're driving can have "an immediate impact" on your rates, he says.
3. Adjust your auto coverage.
If the kids have left for good, take them off of the policy. If they are simply away at college, ask about a distant-student credit, says Jack Hungelmann, an insurance consultant and author of "Insurance for Dummies." Usually, it applies if your child is a full-time student, has gone at least a certain distance to college and hasn't taken one of the family cars to campus. It can give you a nice break on the premiums.
Homeowners insuranceA lot of things change as you get older and your household shrinks. Here are some ways to take advantage of that:
4. Cover those valuables.
If you're planning to travel, it's good to check your homeowners policy.
Obviously, you want replacement value for anything lost or stolen. You also want to see whether the policy limits your losses in specific pricey-item categories, such as jewelry, antiques, furs or collectibles. If it does, a special policy, called a "floater" or "rider," can cover the value of individual items.
5. Do your due diligence.
Are you neglecting routine maintenance, such as making sure that the furnace is serviced or the pipes don't freeze? Your policy may require you to keep up on those things. "Folks should be aware," Sevigny says. "Ask your agent."
6. Consider an umbrella policy.
"As you grow older, typically, your assets will grow," Sevigny says. As a result, you have more to lose in a liability claim.
One solution: an umbrella policy, which adds extra liability coverage. Policies are sold with coverage of "typically $1 million to $5 million," Sevigny says. Annual premiums start at about $250 and go up from there, depending on where you live, your assets and exposure, and how much you purchase.
7. Don't automatically buy insurance for your kid's dorm room.
Even if your student lives in an off-campus apartment, rather than a dorm, belongings may still be covered under your existing homeowners policy, says Hungelmann. Check with your agent.