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Are You Properly Insured?

Find out if you are adequately covered in these 3 types of policies

Close up of Life Insurance Policy, Do you need life insurance?


As a general rule, you want to insure against anything your family can't afford to lose.

Get a Clue

En español | Most consumers — roughly 90 percent — are literally clueless when it comes to a database known as the Comprehensive Loss Underwriting Exchange (CLUE), used by insurers to determine risk for a specific home. But reality can set in in a hurry when, after buying a home, your insurance is way higher than expected (or even denied) because of claims filed by previous owners.

Avoid surprises: Those claims — whether paid or not — remain in the CLUE database for seven years. When spotted by your insurer, that CLUE report can increase rates significantly, according to InsuranceQuotes. Current property owners can get one free CLUE report a year (call 866-312-8076 toll-free). To avoid surprises, ask for a report before signing a contract.

Negotiation leverage: A home with a history of claims may indicate problems that will need to be fixed, says Loretta Worters of the Insurance Information Institute. A buyer who knows about these issues may be able to negotiate a better price. But it's also good for sellers to show a report to prospective buyers, especially if claims resulted in repairs being made.

—Sid Kirchheimer

Do You Still Need Life Insurance?

When you were younger, you needed a way to support your spouse and children if you died, which could leave them in a financial lurch. Term policies are generally the best way to protect against that. Later in life, however, the kids have left the nest, and even if you are still working, you have fewer years of income to protect. As a general rule, you want to insure against anything your family can't afford to lose. Thus, if no one is dependent upon your future income, you should consider dropping the policy. And what about whole or universal insurance? That's a more nuanced decision, since canceling those policies can trigger income taxes on any gains. And some policies are also useful estate-planning tools.

—Allan Roth

Protect Your Treasures

Is your jewelry underprotected? In cases of theft or damage, most homeowner's policies cover only up to $1,500. Get an appraisal, and buy a separate jewelry policy or rider, says Madelyn Flannagan, vice president of education for the Independent Insurance Agents and Brokers of America. Cost: about $10 to $25 per $1,000 of coverage each year.

—Tara Finnegan Coates

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