Last week we kicked off 2021 with our inaugural article, Part One: 10 New Year’s insurance resolutions for a better 2021. This week we are providing part two. This list was developed to offer a few new year’s insurance-related resolutions to address throughout the year that can help improve your coverage and lower your premiums.
Part one of our new year’s insurance resolutions series focused on lowering your car insurance, updating your home insurance, and getting your life insurance in order. Our final group of five suggestions looks at improving financial habits, prepping for emergencies, planning for your final days, and taking advantage of insurance broker services to increase the number of choices available to you.
6. Concentrate on good financial habits
Did you know that your credit score actually effects your insurance premiums? Yep, it’s true. Most people forget that when they signed up for their policy, the provider more than likely ran a quick check into your credit score. They don’t perform a complete credit inquiry, which can impact your overall credit report, but do look to see if you have a history of missed payments.
Insurance companies are interested in your financial discipline because it’s actually a very good indicator of how you will maintain your property or behave behind the wheel. A higher credit score generally correlates to fewer insurance claims.
If you can demonstrate you have improved your financial habits, it may pay off in lower insurance rates. And not only that, you might be able to access a lower mortgage rate as well. Keep your budget in order and the result will be savings on many levels.
7. Restock your home and vehicle emergency kits
If there’s anything 2020 has taught us, it’s to expect the unexpected. Fully stocked home and vehicle emergency kits are always a good idea, and have become even more necessary during this time of uncertainty.
The Government of Canada suggests the following items for a home emergency kit:
- Bottled water
- Canned food or food that will not spoil (be sure to replace regularly)
- Toilet paper and paper towels
- Sanitary wipes
- Battery-powered radio
- Extra batteries
- Matches or a lighter
- First-aid kit including several weeks of all prescription medications needed
- Copies of important family documents
A vehicle emergency kit should always include:
- A comprehensive first-aid kit
- A sharp, retractable utility knife or seat belt cutter that you can use to free a trapped passenger in a life-or-death situation
- Tow rope
- Fire extinguisher
- Jumper cables
- A snow shovel, ice scraper and snow removal brush
- Road salt or sand
- Antifreeze and windshield washer fluid
- Reflective triangles, road flares or warning lights
- Flashlight and spare batteries
- Matches or a lighter
- Candles (and deep metal cans for holding lit candles)
- A whistle or noisemaker for attracting attention
- Blankets, spare clothing and spare footwear (boots are best for year-round use)
- Non-perishable food (energy bars, canned fruit and vegetables, etc.)
- Drinking water, stored in metal containers or plastic bottles that will not shatter if frozen (be sure to replace drinking water at least semi-annually, if not seasonally)
- Provincial road maps
8. Keep working on your emergency fund
Always having the money in the bank for your deductible should you have to file an insurance claim is just one reason why an emergency fund is a good idea. Employment these days is more precarious than ever, and unfortunately there are many Albertans with jobs in fields that have been shut down or seriously restricted due to the COVID-19 pandemic.
Experts say an emergency fund should equal at least three to six months of your regular expenses at minimum. Ideally, an emergency fund should total from three to six months of your annual income – not just your expenses. Inquire with your bank about a tax-free savings account that also earns interest. The most competitive interest rates range from about 0.5% to 2.0%. The best and most pain-free way to start saving is to set up an automatic transfer from your chequing account at the same time every month so that you don’t even have to think about it. A certified financial planner can help you set up a plan of attack for building your emergency fund.
Other small but effective ways to save include:
- Setting a spending limit for yourself for each day
- Eating at home more often
- Saving loose change in a “piggy bank”
- Taking lunches to work
- Making coffee instead of buying it
- Using public transit
- Taking advantage of discounts, coupons, and sales
9. Write or update your will
To avoid conflict upon your death, everyone should have a will. It’s not as onerous (or expensive) a task as it seems. Many people draft what is called a “testimony will,” where the document is prepared and then witnessed. You can do this yourself, but we recommend the oversight of a wills and estates attorney. This ensures that your wishes are adhered to and your estate is dealt with properly.
When considering your will, first make note of the total value of all of your property, investments, and savings, as well as your vehicle. The total also needs to reflect any debt or money owed, such as the amount still left to pay on your car loan or mortgage. This will help you determine whether your life insurance coverage is adequate for covering death and funeral expenses, as well as any outstanding debt. Be transparent with those involved about the contents of your will, especially your executor, so everyone knows what to expect. Make it clear how you would like your life to be celebrated, too, so there are no arguments about where to scatter your ashes or even what songs to play at your funeral.
Don’t just plan for your death, either. Plan ahead for your care should you require health assistance. Discuss with your family your personal directives, such as where you might like to live should you become incapacitated. It’s also smart to appoint an enduring power of attorney who can act on your behalf should you become unable to do so.
Finally, consider whether you would like to leave anything to charity. Begin to set up an enduring legacy for yourself early to be able to provide a substantial gift upon your death.
10. Speak with an insurance broker about your options
There are many reasons why it’s wise to choose an insurance broker, not the least of which is that we are highly trained experts in our field. Our staff of skilled and knowledgeable insurance brokers have decades of experience under our belts and we thrive on being able to help people access better coverage at lower premiums.
We are always here to answer any questions you may have about your insurance. We work for you, not the insurance companies, and can pick and choose the best options available from several of Canada’s top providers. Give us a call so we can get to know you and your unique insurance situation. Contact us at our Calgary, Banff, Edmonton and greater Alberta offices.