7 Common Mistakes to Avoid When Choosing Homeowners Insurance
Part of being a responsible homeowner is investing in quality home insurance to protect both your house and your family. However, since the average homeowner only files a claim once every 10 years, it’s easy to make mistakes when choosing homeowners insurance.
Unfortunately, those mistakes can often leave you facing expensive repairs without help. Choosing the right policy from the beginning is the best way to keep your home safe.
So, where do you start? Before you start looking at coverage options, make sure you understand these common insurance-buying mistakes and how to avoid making them yourself.
1. Not Buying Enough Coverage
When you’re shopping for insurance, your main focus is almost always going to be the price of each policy you find. While saving money is important, you should never do it at the expense of your home’s safety.
Often, cheaper coverage isn’t enough to fully protect your home.
When you’re looking for new coverage, take the time to fully understand your home’s coverage needs. Think about how much it would cost to replace your home and everything inside of it. Then, choose the coverage that will make that possible.
Remember, better coverage with higher coverage limits will almost always cost more. However, if you end up needing to file a claim, you’ll end up saving money.
2. Going With the First Provider You Find
One of the worst mistakes you can make when you start looking for coverage for new homeowners is to choose the first insurance provider you find. You need to shop around to make sure you’re getting the best coverage at the best price.
Remember, insurance providers price their plans differently. One provider may charge you a premium for coverage that won’t fully protect your home while another may offer higher quality insurance at a much lower price. You won’t know which is which unless you shop around.
Try to get quotes from at least three insurance providers and compare the coverage details of each policy. Then, look at the monthly premium payments you’ll have to make as well as the deductible.
You’ll also want to do your due diligence and research each insurance company before you sign on the dotted line. Make sure they have a reputation for settling claims fairly and quickly. If they don’t, keep looking.
That said, if a company doesn’t settle your claim fairly, there’s still hope. You can always hire a property insurance lawyer to dispute the settlement.
3. Forgetting to Ask for Discounts
Believe it or not, most homeowners’ insurance providers offer discounts on coverage. However, they rarely advertise those discounts when you’re first discussing coverage options or meeting insurance agents.
When you start shopping, make sure to ask about any discounts or promotions they’re running. For example, you may be able to save money on your policy if your house has energy-efficient appliances, a new roof, or even a security system. If you bundle your auto insurance coverage with the same provider, you may save even more.
If the company doesn’t have any discounts, don’t panic. They may still be the best option. Just make sure you choose a provider you’re comfortable with and carefully review the coverage details.
4. Ignoring Supplemental Policies
Home insurance policies cover the most common house damage, but they don’t cover every possible issue. In fact, many environmental hazards like floods, earthquakes, and even wildfires aren’t included in the standard policy.
If you’re worried about those hazards, discuss your concerns with each insurance agent you speak with. Reputable agents will help you find supplemental policies to further round out your coverage.
Though the supplemental policies add to your insurance costs each month, they make sure your home will stay safe no matter what type of disaster comes your way.
5. Choosing an Overly High Deductible
The easiest way to lower your monthly insurance premiums is to increase your deductible. When you’re buying coverage for the first time, it’s easy to think that you’ll save money by choosing a higher deductible, but it’s not the best idea.
Remember, the deductible is what you pay out-of-pocket anytime you file a claim. If you price it too high, you won’t be able to use your insurance policy when you need it most.
Think about how much you’re comfortable paying to file a claim with your insurance provider. It doesn’t have to be incredibly low, but it should be low enough that you’re able to afford to file a claim in the first place.
6. Going With the Minimum Required Liability Coverage
As a homeowner, you’re responsible for everything that happens on your property. This means if a guest or visitor gets injured, you could end up paying for the cost of their medical treatments.
Worse, if a visitor gets injured on your property and presses charges, you could get stuck with a costly lawsuit.
Liability coverage helps cover those unexpected costs, but the standard amount may not be enough to protect your family. Look at the liability coverage each policy offers and consider investing in additional coverage if needed.
7. Not Reevaluating Coverage Needs Yearly
Your coverage needs will change from year to year as you make improvements around the house and upgrade your belongings. If you leave your coverage at the same levels year after year, your home could end up underinsured.
Instead, reevaluate your coverage needs each year. Note the improvements you make, conduct a thorough home inventory, and discuss those changes with your insurance agent.
They’ll help you figure out if your coverage is adequate or if you need to increase your coverage limits.
Choosing Homeowners Insurance Can Be Simple
Making the decision to buy a house is a big commitment, but choosing homeowners insurance is vital if you want to protect your investment. Familiarize yourself with these common insurance mistakes before you start looking for coverage.
This way, you’ll be able to avoid the most common pitfalls and can get the right coverage from the very beginning.
Looking for more tips and tricks to help you get settled into your new home quickly? Check out our latest posts.