When to Update Your Insurance After Major Life Changes

Life is full of exciting milestones—whether it’s buying a new home, welcoming a baby, or saying “I do.” But amidst the joy of these major life changes, it’s essential to remember how they can impact your insurance needs. Keeping your insurance policies up to date ensures you’re properly protected during these new chapters of life. Here’s a guide on when and how to update your insurance after some of the biggest changes.

1. New Home

Buying a new home is a major financial investment, and protecting it is critical. Whether it’s your first home or a vacation property, updating your homeowners insurance should be a top priority.

What to Do:

• Review your coverage limits: Make sure your homeowners policy accurately reflects the value of your new home, including the cost of rebuilding it in the event of a disaster.
• Update your personal property coverage: Moving into a larger home often means new furniture and other valuables, which may require adjusting your coverage for personal belongings.
• Consider additional coverage: Depending on your location, you may need to add coverage for floods, earthquakes, or other natural disasters that aren’t covered by standard policies.

2. Marriage

Tying the knot comes with a host of new responsibilities, and one of those is updating your insurance. Marriage affects everything from auto to health insurance, and it’s important to make sure both you and your spouse are protected.

What to Do:

• Combine auto insurance policies: Married couples often save money by bundling their auto insurance policies under the same provider.
• Update life insurance beneficiaries: If you have life insurance, you’ll want to make sure your spouse is named as your beneficiary.
• Consider life insurance policies: If you don’t already have life insurance, now is the time to think about getting a policy to protect your spouse financially in the event of your passing.

3. New Baby

Welcoming a new member to the family is a time of great joy—and responsibility. As you plan for your child’s future, reviewing your insurance is an important step.

What to Do:

• Increase life insurance coverage: With a child depending on you, it’s essential to increase your life insurance coverage to ensure they’re provided for if something happens to you.
• Health insurance: Don’t forget to add your new baby to your health insurance plan within the required time frame, typically 30 to 60 days after birth.
• Update disability insurance: Consider boosting your disability insurance to cover your family’s needs in case you’re unable to work due to illness or injury.

4. Job Change

Whether you’re starting a new job, being promoted, or even retiring, job changes can affect your insurance needs, especially when it comes to health and life insurance.

What to Do:

• Review health insurance: If your new employer offers health insurance, compare the benefits with your existing plan to ensure it meets your needs.
• Consider supplemental policies: Look into options like disability insurance, especially if your new job doesn’t provide adequate coverage in case of illness or injury.
• Reevaluate life insurance: If your life insurance is provided through your employer, understand the coverage limits and consider purchasing additional life insurance if needed.

5. Divorce

While divorce is often a difficult time, it’s crucial to review and update your insurance policies to reflect your new circumstances.

What to Do:

• Update beneficiaries: Make sure to change the beneficiaries on your life insurance and retirement accounts if necessary.
• Review auto and homeowners insurance: If you shared these policies with your spouse, you’ll need to update them or split into separate policies.
• Health insurance: If you were on your spouse’s health insurance plan, you’ll need to find new coverage. Many people qualify for COBRA, but you may also want to explore options through your employer or the marketplace.

6. Major Home Renovations

If you’re making significant improvements to your home, such as adding an extra room or installing a pool, your homeowners insurance policy will need to be updated to reflect the new value of your home.

What to Do:

• Increase dwelling coverage: Major renovations often increase the replacement cost of your home, so you’ll want to ensure your dwelling coverage reflects the new value.
• Consider liability coverage: Adding features like a pool may increase your risk, so it’s wise to increase your liability coverage or add an umbrella policy for extra protection.

7. Starting a Business

Whether you’re freelancing from home or opening a brick-and-mortar location, starting a business impacts your personal insurance policies.

What to Do:

• Check homeowners insurance: If you’re running a business out of your home, check if your homeowners insurance covers business equipment. You may need a separate business policy.
• Commercial auto insurance: If you’re using your car for business, such as making deliveries, you’ll need commercial auto insurance to ensure you’re covered.
• General liability insurance: For any business, general liability insurance is essential to protect against lawsuits or accidents involving clients or customers.

When to Contact Your Insurance Agent

It’s a good rule of thumb to review your insurance whenever a significant life event happens. If you’re unsure whether a change in your life requires an insurance update, don’t hesitate to reach out to your insurance agent. They can help you assess your current policies and guide you on the right changes to make.

Bottom Line

Major life changes often come with new risks and responsibilities. By updating your insurance to reflect these changes, you can ensure that you, your family, and your assets are properly protected. Whether you’re buying a new home, growing your family, or starting a new career, taking the time to review and adjust your insurance policies is an important part of safeguarding your future.