How often should I review my insurance coverage?

I literally have a stack of insurance policies and I rarely bother looking at them. Recently I had to check something on a policy that I hadn't looked at in years and I noticed that the coverage I have is no longer enough for my situation right now.

My question is: Is there a general rule about how often you should review your insurance coverage? What would you recommend?

Hi there,

The purpose of insurance is to protect against financial risks. Because your financial situation and risks change over time, you need to adjust your insurance coverage to match.

Reviewing your insurance coverage every time a major change occurs - such as a change in your income or wealth, a major purchase or a change in your marital status - is recommended. If you have the time, consider reviewing your coverage annually.

Some of the most important policies to review regularly include:

1. Household insurance. Every time you buy something, the value of your property increases. When you sell or get rid of possessions, the value of your property goes down. Many items lose value over time as well. Compare the value of your personal property to the benefits provided by your household insurance coverage once a year on average. If the value of your property has increased or decreased, adjust your insurance coverage to match.

2. Accident insurance. Whether or not you need to be covered by accident insurance through your compulsory Swiss health insurance policy depends on your employment status. If you become employed after a long period of self-employment or unemployment, you should make sure to remove accident insurance from your policy as soon as you begin receiving accident insurance through your employer. When you become self-employed or stop receiving unemployment benefits, you should make sure to add accident insurance to your health insurance policy.

3. Personal liability insurance. If you take on more risk - by becoming more active, having more children or getting a dog, for example - you should check your liability insurance coverage to make sure the benefits cover all possible scenarios. If your risk levels go down, you may not need the same amount of insurance.

4. Life insurance. If you took out life insurance as a guarantee against certain risks - like your family losing their home if you die before paying off your home loan, for example - consider whether or not those risks are still valid. If your financial responsibilities increase, on the other hand, you may want to consider taking out more insurance coverage. If your personal life and relationships change, you may want to change your life insurance beneficiaries to match.

5. Car insurance. As your cars lose value, the need to protect your investment by paying for fully-comprehensive, semi-comprehensive or even collision insurance may become irrelevant. Take time to appraise the value of your car from time to time and consider what level of insurance coverage is still worth paying for.

6. Health insurance. If you took out supplementary hospital or outpatient insurance for a specific purpose - to cover childbirth or a trip to another country, for example - it could be that you no longer need certain health insurance coverage. Review the coverage you receive from various health insurance policies and riders to avoid paying for coverage you will never use.

Best regards from Moneyguru

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