Why an Annual Personal Insurance Review Matters: Protecting What You’ve Built

Insurance isn’t the most exciting part of a financial plan—but it’s one of the most important. Your insurance coverages are designed to protect your income, assets, and family from unexpected events. The challenge is that policies you set up years ago may no longer reflect your life today.

A quick annual review ensures you're properly protected—not overpaying, underinsured, or missing an important type of coverage.

Here’s what to review and why it matters.

1. Homeowners Insurance: Has Your Coverage Kept Up With Costs?

Home values, construction costs, and replacement costs continue to change year-to-year. Many policies automatically adjust for inflation, but not always enough.

Review:

Replacement cost vs. actual cash value
Personal property limits and special coverage (jewelry, collectibles, tech)
Water backup, sump pump failure, or sewer/drain coverage
Extended dwelling coverage (125–150% of replacement cost)

If you’ve remodeled a kitchen, finished a basement, or added outdoor structures—your coverage should be updated.

2. Auto Insurance: Are Your Liability Limits High Enough?

Many people still carry liability limits based on the first policy they purchased in their 20s.

If your income, assets, or net worth have grown, your coverage should as well.

Consider reviewing:

Bodily injury coverage
Property damage limits
Uninsured/underinsured motorist coverage
Deductible strategy (higher deductibles often save money long-term)

If a serious accident occurs, the difference between minimum coverage and adequate coverage can be life-changing.

3. Umbrella Liability: The Most Overlooked and Cost-Effective Protection

Umbrella liability coverage is designed to protect you against large lawsuits or claims that exceed your underlying auto or home limits.

For most households, $1–3 million of coverage is appropriate.

Cost: Generally $150–$500 per year—one of the most affordable ways to protect wealth.

4. Life Insurance: Does Your Policy Still Match Your Needs?

As life changes, your reasons for life insurance change as well.

Review:

Coverage amount
Length of the term
Ownership and beneficiary designations
Whether a permanent policy still serves a purpose

If your children are grown, debt is paid down, or your financial independence has increased, it may make sense to reduce or simplify coverage.

5. Disability Insurance: Protecting Your Most Valuable Asset—Your Income

For most professionals, the ability to earn income is worth far more than any investment account.

Confirm:

Benefit amount (typically 60%–70% of income)
Elimination period (waiting period before benefits begin)
Own-occupation definition (especially important for specialists)
Riders: cost-of-living, future purchase, residual benefits

If you received a raise or changed employers, your coverage may need updating.

6. Long-Term Care Coverage: Start the Conversation Early

Planning for long-term care isn’t urgent—until it is.

Even if you’re not ready to purchase coverage, consider:

Hybrid long-term care options
Self-insurance planning
Tax-deductible structure for business owners
Benefits that coordinate with your financial plan and estate strategy

Evaluating early gives you more options and better pricing.

7. Beneficiary Review: A Five-Minute Fix That Prevents Major Problems

Confirm that:

Primary and contingent beneficiaries are current
Policies align with your estate plan or trust structure
No outdated names (ex-spouses, deceased relatives, missing successor beneficiaries) remain on file

This is a small step with significant legal and financial implications.

The Bottom Line

Insurance isn’t about fear—it’s about confidence. An annual review ensures your coverage continues to match your life, goals, and financial situation.

A 30-minute review now can prevent costly surprises later.

By James Blue, Fee-Only Advisor | Blue Advisors

James Blue is the founder of Blue Advisors, a fee-only financial planning and investment management firm based in Columbus, Ohio.

This content is provided for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. The views expressed are those of the author as of the date published and are subject to change without notice. Blue Advisors is a fee-only registered investment advisory firm. Advisory services are offered only pursuant to a written advisory agreement and to clients in the State of Ohio, the Commonwealth of Pennsylvania, and other jurisdictions where Blue Advisors is properly registered or exempt from registration. Past performance is not indicative of future results. Readers should consult with their financial advisor, tax professional, or attorney before making financial decisions.