Getting home insurance can be daunting with all the features and options and that’s coming from Winder’s top insurance agent too! We’ve put together this is of mistakes that most home owners make when insuring their home.
Mistake #1: Underinsuring your home
Why? Most people go with the least amount of coverage, in hopes of saving money. They buy just enough insurance to cover their mortgage. Or only insure their home for its real-estate value. This could be less than actual costs to rebuild.
The Fix: Buy enough coverage so you’ll be able to completely rebuild your home. And replace your possessions, if something bad were to happen. Building a house like yours is likely to cost more than what it’s worth. Especially if construction prices have increased in the years since your home was built. If the disaster was wide spread, rebuilding could be even more. Supply will outweigh demand. Make an appointment to review your policy. Come prepared and ask a lot of questions.
Mistake #2: Underestimating the extent of your homeowners coverage
Why? Most people just file their paperwork without fully reading it. Resulting in folks never getting a full understanding of what is or isn’t covered.
The Fix: Ask your agent to summarize your policy for you. Be prepared. Ask a lot of questions.
Mistake #3: Setting your deductible too high or too low
Why? Most of us set our insurance deductibles too high or too low. Mostly because we think it’ll save us money. Unfortunately, this usually backfires. With too low of a deductible, we pay more when something goes wrong. Too high and we end up with large premium payments.
The Fix: Experts suggest setting deductibles at $500 or $1,000. Just make sure you have that amount on hand, if needed.
Mistake #4: Buying just the legally required amount of liability insurance
Why? Liability coverage protects you if people are injured while in your house. And if you, family members, or pets injure someone or damage their property. Standard homeowner’s policies include this type of coverage. Albeit, at a very minimal level. Most people don’t consider buying more.
The Fix: Consumer Reports, recommends at least $300,000 of protection in this area. That’s $200,000 more than typically offered in standard homeowner’s policies. If you agree, contact your agent about bumping up your coverage. Premiums will increase too, so keep that in mind.
Mistake #5: Failing to let your insurer know when you’ve gone through various “life changes”
Why? Some “life changes” seem so common that you don’t think your insurer would care. They do. Insurance companies have refused coverage because people failed to disclose a new dog. Or a remodel.
The Fix: It’s OK to “bother” your insurance agent. They want to know about changes in your life. Agents are there to help you ensure coverage. And that all your insurance needs are being met.
Mistake #6: Not taking the time to make an inventory of your possessions
Why? Who wants to go through all of their stuff, catalog and categorize it? That’s how we spend our weekends… not! Still, it’s an activity worth devoting some time to. Standard homeowner’s insurance covers more than the structure of your house. It covers everything inside as well. In order to get that coverage, there needs to be an accurate accounting. Without it, your insurance company will probably reject your claim. They need proof to justify the payout.
The Fix: Create an inventory using one of the many apps or other tools. Afterward, you may need to increase your coverage. Or even purchase a rider to protect particularly expensive or valuable items. Your agent should be able to help, if needed.
Mistake #7: Dragging your feet when it comes to resolving issues that pop up
Why? Procrastination is a part of life, right? Or at least it’s true for a lot of us. Especially when it comes to things or situations we find overwhelming. It’s easy to drag our feet and put off dealing with them.
The Fix: Tackle household issues as soon as you become aware of them. Take the mold example mentioned earlier. If you ignore it and mold spreads, you’ll have an even bigger problem on your hands. The likelihood of a claim being rejected, due to your inaction.
Mistake #8: Choosing a homeowners insurance provider based on price
Why? Most people make buying decisions based solely on price.
The Fix: In addition to comparing home insurance quotes, research how financially sound the insurance company is. Look for reviews on customer service. How do they handle or respond to claims? Also, don’t forget to ask others for a referral.
Mistake #9: Neglecting to bundle your insurance policies
Why? Maybe you bought insurance policies at different points in your life. And you didn’t know you could have bought them all from the same company. Or maybe you didn’t know your insurance company offered a wide range of policies.
The Fix: If you’ve got insurance policies from different carriers, check with your agents. Ask what kinds of discounts they’ll give you for consolidating with their company. Assuming that’s possible.