Why is it important to review your insurance policy annually?

Reviewing your insurance policy annually is crucial to ensure that your coverage aligns with your current needs and to take full advantage of any available discounts. Life circumstances can change significantly over the course of a year—such as acquiring new vehicles, moving to a different area, changes in family structure, or shifting to a different job—which can affect both your requirements for insurance coverage and the cost of that coverage.

By conducting an annual review, you can identify gaps in your existing plans, adjust coverage limits where necessary, and explore any discounts that may apply due to loyalty, bundling policies, or changes in your risk profile. This proactive approach helps ensure that you are not underinsured or overpaying for coverage that does not reflect your situation.

Thus, the correct answer emphasizes the importance of tailoring coverage to your current lifestyle, making it a key reason for conducting an annual review of your insurance policy.