5 Common Mistakes Retirees Make with Their Personal Insurance

December 15, 2015

If you’re recently retired or are personal insurance retirementalmost there, congratulations. We wish you a productive, happy retirement with family and friends. We’re sure you’re proud of how far you’ve come over the years. And how much you’ve accumulated in financial and tangible assets.

Which is why you should start looking at your insurance in a different way. Accumulating wealth and assets is one thing, but now that you’re ready to take advantage of your success, protecting them properly is another. This is why your insurance program becomes a bit more complicated because of the value of the assets you’ve slowly acquired over the years.

Two things that can seriously disrupt your comfortable retirement are exposure to personal lawsuits and property loss to your home and contents. Lawsuits could be the result of car accidents, visitors slipping and falling at your home, or even lawsuits resulting from your charity work. Also, hiring contractors or domestic staff without insurance can leave your life savings and assets unprotected.

Property losses at home may be much more substantial than they were when you started out. Think of the furniture you’ve accumulated over the years. The valuable antiques…or even new items purchased many years ago that have not only held their value, they’re worth more!

You probably have more jewelry now. You might even be starting to think about giving some away to close family and friends. And what about your collections? They may have become substantially more valuable: toy trains, stamps and coins, and those baseball cards you saved from your mother’s waste basket so many years ago. And this includes fine art and wine, too.

Liability lawsuits and your accumulated, valuable property are major concerns for you at retirement. So here’s what you can do…

5 Tips on Protecting Yourself from Losses that Could Adversely Affect Your Retirement Plans

1. Purchase Umbrella Liability Coverage
Remember, this is the time that the value of everything you own has probably reached its peak. It may be more than you realize. The courts won’t leave you without a home if you are sued, but they can order a liquidation of assets to pay off a losing suit. That could include your regular savings or your second home.

So, it’s reasonable to purchase enough umbrella coverage to match your vulnerable assets. But the surprising thing is, the cost to do this is relatively low. Call us for quotes, but the premiums for $1,000,000, 2,000,000, or $5,000,000 are just in the hundreds of dollars.

2. On a Non-Profit Board? Look into a Directors and Officers Liability Policy
So many of us take advantage of our newfound time to volunteer for the board of our favorite charity. You wouldn’t think that charity work could expose you as a volunteer to a lawsuit, but if you are in a position of power on the board, it can. So we recommend that you make sure your non-profit board carries a Directors and Officers Liability Policy.

We’ve talked about this before on our blog. We handle this kind of insurance and we suggest you call us to either review your current policy or quote a new one.

3. Home Business Liability for Those in Consulting or Making Some Money from Their Hobby
Your hobby might turn into a small business now that you have more time. If it does, you should talk to us about business liability. Check our post here for more on home businesses and the risks involved. Your homeowners policy is comprehensive when it comes to personal liability, but it is not meant for business. Give us a call to find out how to protect your home business.

4. Replacement Cost on Your Home
Looking back on it, if you purchased your home years ago, you probably didn’t pay nearly what the replacement cost is today. And that’s the thing to remember, replacement cost. If there is a fire or severe wind damage to your home, we pay to replace the damaged portion.

We don’t go out and buy a used room from the hardware store to replace the back of the house damaged by a falling tree. We pay contractors to rebuild from scratch.

Getting full replacement cost on your home is even more important if it’s a high value home. It may have superior quality workmanship and materials that your current insurance doesn’t account for. So, now that you are retired, take the time to be sure you insure your home to its actual replacement cost so you won’t be caught short after a loss.

5. Replacement Cost on Your Possessions and Valuables
The difficult part of insuring to value for your home contents is inventorying everything. You have probably accumulated more than you thought over the years. This problem is usually solved when you add Replacement Cost Contents to your homeowners policy. That’s because it automatically raises your contents coverage from 50% of your dwelling to 70%. Even though, you should conduct an inventory to be sure even the 70% figure is enough.

Along with your regular contents, you may have more jewelry and collectables than you realized. There are limitations on your homeowners insurance for certain kinds of property like jewelry, fine art, wine, and stamps and coins. Get all of this appraised and we can take care of insuring it for you. This also might be a good time to sell some of these items. Or give them away to loved ones.

So don’t let lawsuits or property damage put a damper on your retirement. Let your insurance company take the risk away from you so you can sleep better at night…and enjoy your retirement every day.

Until next time,
Your SZW Team

Scalzo, Zogby & Wittig, Inc. is your New Hartford area independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000. Or request a quote here.