<prompt> Human: 30-day challengesWe are pleased to continue our 30-day challenge series. Past challenges can be found hereThis months 30-day challenge is to Audit your insurance coverage! How long has it been since you examined your coverage or gotten a quote from another company to look for cheaper insurance? As your life evolves, its important to make sure you update your insurance coverage as well. This is also a good way to save some money if you can find a better deal for insurance elsewhere or if you find yourself overinsured in some specific area. Why insurance?Insurance is an approach to handle the problem of risk. Most likely, during your life, one or more of these things will happen: you will be in a vehicle accident, you or someone close to you will experience serious illness or injury, or you will lose your job. Positive events have associated risk as well: ask anyone who has had a child, puppy, house, or marriage.You can choose to retain each of those risks: decide that if the bad thing happens, you can afford to pay for it, to self-insure. For example, if you lose a laptop, you can buy another one. You can also reduce the risk, say, by not driving on icy streets or by having chains on your tires. The other ways to deal with risk are to avoid it dont buy a puppy or transfer it insurance!.Most of us dont think about risk until the bad thing happens. We are in a vehicle crash with an expensive car, someone is injured, and only then it dawns on us that we might be underinsured.For many major risks, most people share the risk with an insurance company through various insurance products. If you own a vehicle, most likely you will be required by your state to have liability coverage personal injuries and property damage caused by you. If you have a mortgage, your mortgage holder will require you to have homeowners insurance and some landlords will require renters insurance. Other types of insurance are optional, but may be desirable if available, for example, disability insurance. Audit your insurance coverageTake a minute to think about what insurance coverage you currently have, whether you may be paying too much, and whether your coverage limits are appropriate: Car Insurance Health Vision Dental Insurance Life Insurance Homeowners Renters Insurance Jewelry InsuranceAlthough insurance is an important financial tool to protect you against emergencies, it can also be a major drain on your budget. Insurance agents often use the fact that some insurance is important to make you feel that the more insurance you have, the better off you are.Its wise to only insure what you need to insure. What do you need to insure? Anything that you could not easily afford to replace with your cash savings or where the loss would significantly set you back financially. In the next 30 days, review not only the types of insurance you have, but the level of coverage you have in each type. Here are some ideas for various types of insurance: Car InsuranceAssess all the types of coverage you have on your car. See the wiki article on car insurance for more details and ways to save money. For example, if you drive less than 10,000 miles per year, call your insurance company and see if they provide a low-mileage discount.Liability insurance is required by law if you drive and is very important: Would you be able to pay out a 300,000 lawsuit if you injure someone in a car accident? Liability insurance is not a great place to skimp.Coverages for uninsured motorists an uninsured or underinsured driver injures you or your passengers and medical payments you or your passengers are injured in an auto accident are also worth having. They are less expensive than liability coverage and the irresponsibility of others is a major risk.Also consider whether your collision and comprehensive deductibles coverage is appropriate or necessary, especially if you have an older car or significant savings. Eliminating or reducing these types of coverage can reduce your insurance bill, but youll be left on the hook to replace or repair your own car if you or mother nature damage it.Finally, when you see car insurance advertisements selling you better car replacement or one model year newer insurance, realize that this is a great deal for the insurer and not as great for their customers. Buying these policies mean that youre paying for a piece of a newer car every single month even though the odds of taking advantage of these policies are relatively low. Health Vision Dental InsuranceIn the U.S., some form of catastrophic health insurance is vital for nearly everyone, as a week in an intensive care unit is enough to bankrupt all but the wealthiest. However, consider your expected use of healthcare services. If you are young and healthy, you may not need to fork over the extra dough for a Gold plan with lots of coverage. See the wiki article on health insurance for more details. Life InsuranceRemember the principle of insurance? Only insure what you couldnt afford to lose. If you have children or a spouse that would be unable to maintain their standard of living without your income, then you may need to insure your earning ability. That means you take out a term life insurance policy that pays your spouse andor dependents in the event that you die and can no longer earn money to provide for them. However, if you dont have dependents or if your spouse can earn enough money on their own to provide for themselves, you might not need life insurance at all.Its also important for you to understand that there are two basic kinds of life insurance: term life insurance and permanent life insurance like whole life or universal life. With term life insurance, you pay to cover your loved ones from the risk of your death. With whole life insurance, a portion of your cost goes to coverage, but it also has a cash value component that grows over time similar to an investment account.While there may be some exceptions for the very wealthy, term life insurance tends to be the best choice for the vast majority of individuals.Read our wiki article on life insurance for a deeper discussion. Homeowners Renters InsuranceInsurance on your residence is important for almost everyone who owns or rents a home. Owning a house without insurance could be disastrous if it burnt down, because you likely have a mortgage on it and probably dont have 250k cash to replace it. However, it may be worth checking how large your deductible is. If its only 1,500, you might be able to afford more than that in an emergency. If appropriate, you can increase your deductible to reduce your costs. Note that homeowners deductibles are per incident, though. See the wiki article on homeowners insurance for more details.Renters insurance policies also tend to be very cheap roughly 15 per month for 30,000 of property coverage and 100,000 of liability coverage.Finally, make sure you have an up-to-date inventory of your property so any claims will be easier to make. An easy way to do this is taking a video on your phone as you walk through your home, naming everything as you walk through. Note the make and models of anything expensive like electronics. Make an offsite or cloud copy of the video too! Jewelry InsuranceMost single-issue insurance policies tend to be poor deals for consumers Opinions vary on jewelry insurance, but the default assumption of most people is to carry insurance on an engagement ring is more a product of the jewelry marketing machine than actual need. A few factors make jewelry insurance less necessary than other types of insurance: Your homeowners or renters insurance may already cover jewelry up to a certain value. Check! You should not even be buying jewelry that you couldnt afford to replace with cash. Most jewelry insurance does not cover accidental loss or misplacement. Only theft or damage. Consider your and your SOs sentimental attachment to the piece. If your wifes engagement ring were stolen or lost, could you replace it with cash savings? Would you have a conversation about the importance of replacing it identically or go for a less expensive piece? Another way to save moneyOne thing to consider when reviewing your coverage is that sometimes companies offer discounts for having multiple accounts with them e.g., a multi-policy discount or bundling. When you call your insurance company, ask them about these discounts. For some insurers like USAA, you can even get a discount for adding non-insurance accounts like a savings account. A note on emergency fundsFollowing How to handle an emergency fund of cash equal to 3 to 6 months worth of routine expenses is recommended. If you have no collision coverage on your car and rely on it to get to work, andor a very high deductible on your home insurance 10k, seriously consider the size of your emergency fund, and whether it is enough to get you through a double-whammy such as job loss and a car accident at the same time. Notes on other types of insuranceThe bare minimum for most people is car insurance if they drive, health insurance, term life insurance if others depend on their income, and homeownersrenters insurance. However, there are several additional types of insurance that some people may want to consider. In particular:- Umbrella Insurance: If your net worth exceeds the coverage limits for your car insurance liability or homeownersrenters liability or your profession has high earning potential, you should evaluate whether umbrella insurance is appropriate for your situation. Read more about umbrella insurance in our wiki if this applies to you.- Long-Term Care Insurance: If youre in your 50s some financial advisors advise late 40s, you may want to start considering whether LTC insurance makes sense for you- Disability Insurance: Depending on your situation, you may want to consider disability insurance as well Challenge success criteriaYouve successfully completed this challenge once youve done two or more of the following things: Reviewed the coverage limits on each of your policies and read the associated wiki page. Making changes is up to you and not something you should do without doing more research and reading. This challenge is only about reviewing your insurance. Read more about a type of insurance that you dont currently have. Created an up-to-date home inventory of your belongings. Requested a quote from a different insurance company or inquired about potential discounts from your current insurance company. Read the policy document for at least one of your insurance policies you should know which perils the insurance company covers and which are excluded. Disclaimer: This post is a prompt to review your insurance coverage. Similar to the reddit user agreement we take no responsibility for any decisions you make based on something you read on reddit.  <response>: Consider creating a home inventory also during your review, which can be helpful in the event of loss. Many insurance providers offer online tools for this. Or you can create your own. 