As much as you'd like to, insurance isn't something you can take care of once and then forget. You need to do an annual review of your needs and your coverage.
If you make changes to existing policies, make sure the paperwork is completed. That's something Sandy Doerr, president of Corporate Marketing of America in West Palm Beach, Florida, learned the hard way when he added a vehicle to his automobile policy. Instead of making the change, the company canceled his policy--and Doerr didn't discover the error for several months.
If you switch policies or insurers, study your new policy carefully. Barbara Muret, owner of Fleece & Unicorn Companies in Stillwater, Oklahoma, didn't pay attention to this detail when she changed property insurance policies last year. Her previous policy had classified furniture, fixtures and office equipment in separate categories; the new policy grouped those items. Muret didn't notice the change until a fire in an adjacent store caused so much smoke and water damage to her store that nothing was recoverable. The insurance company paid promptly based on the terms of the policy, but the amount of coverage was much less than Muret intended it to be.
Finally, don't sacrifice coverage for rates. Rick Reetz, president of Robert C. Reetz Co. Inc., a custom equipment manufacturer and metal fabricator in Pawtucket, Rhode Island, discovered the true value of insurance last year when a fire severely damaged his plant. "We never expected a loss of this magnitude," Reetz says. But his agent was on-site within hours, coordinating the repair and restoration process, and providing Reetz with immediate funds as an advance to cover the loss-related costs. While he still insists on competitive rates, Reetz says his first priority is to make sure the coverage will protect his company if another disaster occurs.