How often should an insurance policy be reviewed for adequacy?

An insurance policy should be reviewed for adequacy at least annually to ensure that it meets your changing needs and circumstances. This regular review allows policyholders to assess whether their coverage aligns with current risks, property values, and personal situations. Factors such as life events (like marriage, new children, or job changes), changes in property value, and new assets may necessitate adjustments to the policy. An annual review can help identify gaps in coverage or excess coverage that may not be needed, allowing the policyholder to optimize their insurance for both protection and cost.

While other options suggest reviewing the policy at less frequent intervals, such as only during a claim or at renewal, these approaches may lead to insufficient coverage or unnecessary expenses. Insurance needs can evolve throughout the year, and waiting until renewal or only when a claim arises could leave individuals vulnerable to underinsurance or financial risk. Therefore, an annual review is prudent for keeping insurance coverage relevant and adequate.