Let's Play Will My Insurance Premium Go Up?
This weeks question:
I got a raise, will my insurance premium go up?
Property Insurance and Income
There are a many reasons why the price of your homeowners insurance may increase, but your income is not a factor.
However, if a recent raise means you will make major improvements to your home, or invest in new furnishings or valuables, be sure to review and update your policy and home inventory to include any upgrades or additions.
Our recommendation would be to fore-go any depreciating asset investments. These include investments in a new car, furniture, television, or any other item that loses value over time. These items lose their value the moment you hand over your credit card or write the check.
Consider speaking with one of our professionals about making a more informed investment. Improvements in your home can also be a good investment, especially upgrading a kitchen or bathroom.
Auto Insurance and Income
In addition, your auto insurance premiums won't increase just because you received a raise. However, your rate may change (in either direction) if you have recently:
- changed jobs
- got married
- started using your vehicle for business purposes
Life Insurance Premiums at Work
When you purchase life insurance through work, your salary (or a multiple of it) is tied to your life insurance benefit.You could see an increased amount taken out of your paycheck because, essentially, you have increased your life insurance when you received your raise.
For example, let's assume your previous salary was $60,000 (and your life insurance policy at work was based on that), and you pay an extra premium to purchase coverage up to three times your salary. The amount taken out of each paycheck is usually tied to salary level. So, if your salary goes up to $70,000 and you keep the same coverage options, the amount taken out of your paycheck going forward will typically be higher because the amount of insurance is also higher. Talk to your employer or benefits specialist about your options if you need to change your coverage.
We understand that your life moves quickly and changes can happen quickly. Review your policy every year with your agent to make sure your coverage needs are met, and you are receiving all available discounts.