Friday, February 14, 2014

After you put a ring on it, think about insurance changes

Love is in the air on Valentine’s Day and it’s a popular time of year to pop the question or get married. If you are a taking the plunge soon, here are some insurance matters you will need to address.

Jewelry rider

The first step in getting engaged is typically purchasing an engagement ring. The average cost of an engagement ring this year is nearly $3,500—does your homeowner or renter insurance policy cover the cost of replacing engagement and wedding rings that may exceed $5,000 for both bride and groom? If not, you may be able to purchase a jewelry rider, which is a supplemental policy that covers jewelry that has a value that exceeds the standard policy. Many riders require an appraisal or documentation that may come with your new jewelry purchase.

Homeowner or renter insurance

Combining households also means combining your belongings. Make an inventory of all of your belongings—including wedding gifts -- to determine how much coverage you'll need. It will also make filing a claim easier in the event of a loss or disaster. The National Association of Insurance Commissioners (NAIC) offers a free home inventory app for iPhones and Android phones; you can also download a PDF version. High-value items like artwork, collectables or jewelry may need a personal property rider in addition to your homeowners policy.

If you are moving into a new residence, remember that its location, size of the home and construction type are factors that determine your insurance premium.

Don't immediately cancel a policy on a residence that you are vacating. There is a higher risk of unforeseen damage, such as burst water pipes, fire or theft that can be costly to remedy without the insurance coverage. Ask your insurance agent about a supplemental endorsement that will provide coverage on the home if it is vacant for an extended period of time.

Auto insurance

Married couples have the option of combining their auto insurance policies, but most newlyweds don't discuss their spouse's driving record before getting married. A poor driving record could increase the cost of your premiums. If that affects you, talk to your insurance agent about a named driver exclusion. Other factors that affect your premium are make, model and age of the vehicle.

As a newlywed, you may be eligible for discounts. Some insurance companies consider married couples a lower risk, which could result in lower rates. You may be eligible for discounts if you combine your auto policies or buy auto coverage from the same company that carries your homeowner or renter policies.

Health insurance

When deciding what to do about your health insurance, evaluate your current and future health care needs. You will also want to compare the cost of adding your spouse to your policy against keeping your own health insurance.

If you have health insurance through an employer, you are allowed to add your spouse to your plan outside of the open enrollment period. Contact your company's benefits administrator to find out what you need to do.

For individual plans, contact your insurance agent or company for specific enrollment requirements for spouses. Insurance companies are no longer allowed to deny coverage for pre-existing conditions, nor can they charge more based on medical history. You will need your spouse's Social Security number and income information to add him/her to your plan.

Life insurance

It's never easy to talk about life insurance, especially during such a happy time, but it may help secure your family's financial future. To calculate your needs, consider future income, the cost of raising children and any large outstanding debts such as school loans or mortgage payments. If either or both of you have life insurance, check with your agent about updating your beneficiary information. Remember to check with your employer about any life insurance benefits offered through work.

More information