Insuring a Growing Family

(How to make sure you're protected through the years)

Insuring a growing family

Insurance is one of the most important and effective ways to protect any individual or family from financial ruin due to an unforeseen or catastrophic event. It is also true that for most people, insurance is not a favorite topic of discussion or area of expertise. 

But it’s important to understand that as your family grows and changes, your insurance needs change too. 

What Insurance Is Needed as My Family Grows?

If you’re just starting out as a married couple with no children, your insurance needs are likely fairly simple. You’ll likely need renters insurance if you live in a rental home, or homeowners insurance if you own your own home. You’ll also need auto insurance for any vehicles you own. 

As your family grows and you acquire more valuable assets (as well as more liability risks), you may need to increase the amount of liability coverage you have (protects you from lawsuits) by purchasing a personal umbrella policy. It adds liability coverage to your auto and home insurance in case you have a claim that exceeds the limits of one of those policies. 

Perhaps you’ve now purchased a vacation home, a boat, a motorcycle, or an RV. All of these items need insurance as well. What’s more, as your children get older, you’ll have additional drivers and vehicles to protect. 

Having children also changes the importance of insurance that protects them in case something happens to you. When you have children, it’s time to start the conversation about life insurance, disability insurance, and even long-term care insurance. All of these ensure that you have funds available for your living expenses or medical care if something happens to you or your spouse. 

How Much More Will It Cost? 

It’s hard to predict the cost of insurance for a growing family because every family is unique and has unique insurance needs. Your family insurance costs will be based on the size of your home, how many vehicles you own, the crime and weather risks present in your neighborhood, and many other factors. 

If you purchase an umbrella policy, life insurance, or own a boat, a second home, or some other valuable assets, your insurance costs will certainly outweigh those for a family with one home and one car. 

Independent insurance agents are there to help you get the coverage your need for your family at an affordable price. Independent agents aren’t tied down to one insurance company, so they can help you shop around for affordable coverage and make sure you receive any discounts that you’re eligible for. 

Why Do I Need More Insurance?

There area many reasons to purchase additional insurance as your family grows. Buying a home, having a baby, purchasing valuable jewelry or art, purchasing a motorcycle or a boat, and many other major life changes are all times where you may need to purchase more insurance. 

Insurance protects your assets when you have a major property loss of if you’re sued for some kind of negligence. Your homeowners insurance, for example, helps you recover if your home is lost to a fire or some other disaster. And it covers claims against you if someone is injured on your property or you damage someone else’s property. If you’re sued, it covers your legal expenses and even any financial payouts to an injured party.

Your auto insurance does the same. It may cover your car for damage caused by a storm or some other incident, and it covers your responsibilities to other drivers and passengers if you cause an accident. 

Any time you have a major life change, such as purchasing a home, purchasing a new car, having a new teen driver, having a baby, and more, you need to contact your insurance agent and make sure that any new assets or family members are appropriately covered. Otherwise, if you have a loss or you’re sued, you may have insufficient coverage and the costs could be devastating, even leading to bankruptcy. 

And remember, you don’t always need more insurance. There are times you can reduce your insurance limits, increase your deductibles, or eliminate policies altogether if you get rid of the covered property (e.g., you sell your boat, a child moves out, etc.).

What Household Items Need to Be Insured? 

You need homeowners insurance to protect yourself from devastating financial loss should something bad happen to your home. Your home is likely your greatest asset, but within your home your personal property is likely what you cherish most. Protecting your possessions from loss is financially and emotionally important. You must make sure that you have the right amount of coverage for your household items, and the right type of coverage. 

Homeowners insurance policies provide personal property coverage for loss or damage to your personal belongings including clothing, furniture, appliances, and most other items in your home. This coverage gives you the ability to at least receive some financial reimbursement for those items that may seem irreplaceable. Most home insurance policies start coverage for personal property at approximately 50% to 70% of the amount of insurance you have on the structure of your home, and in many cases this may not be sufficient. 

Do you need more personal property coverage? The best way to determine this is to prepare a personal property inventory, or a detailed list of everything you own and how much each item would cost to replace. 

At What Point Is It Necessary to Get More Insurance for My Family?

It may be time to purchase more insurance if you’ve had major changes in lifestyle or hobbies, or if you’ve made any major purchases or renovations. The goal is to make sure your family members, vehicles, home, and belongings are fully protected.

  • Has anything changed that would impact the amount of coverage you need?
  • Did you purchase a home for the first time or move? 
  • Did you recently have a baby? 
  • Have you purchased a new vehicle? 
  • Will your teenager be driving soon? Have you purchased or do you plan to purchase a new car?
  • Does anyone in your household drive a company-provided vehicle?
  • Have you made any large purchases, such as new jewelry, art, or other valuables? 
  • Do you feel that the coverage on your home and its contents is just right, too much, or too little?
  • Have you finished your basement, remodeled your kitchen, built an addition, or made any other significant changes to your home recently?
  • Does anyone in your household work from home? Has anyone started a home-based business?
  • Do you have any new personal risks that are not being addressed? Have your personal assets increased? 
  • Have you put in a swimming pool or gotten a new dog? 
  • Would you benefit from a personal umbrella policy?
  • Has one of your children moved out or left for college? 
  • Are there any risks that you are susceptible to that are not being addressed? Have your personal assets increased since you purchased your policies? 
  • Has anything changed that would impact the amount of coverage you need for the near future? 

These are all items that may trigger your need for additional coverage or a change in coverage. 

Your best bet is to keep in contact with your independent insurance agent when you experience a major life change like a move, a new child, an adult child leaving the home, purchasing a new car, and more. All of these are important reasons to review your insurance coverage and potentially purchase more coverage or amend your existing policies. 

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