New home buyers often make mistakes in buying homeowners insurance. While they are simple mistakes, they can be very costly. You can avoid making those mistakes by learning as much as you can about a policy before purchasing it. One homeowners’ insurance mistake can cost you your financial security as well as your home. Take the time to talk to your insurance agent and get the information you need to make an informed and well-thought-out decision.
Not Enough Coverage: Replacement Cost vs. Market Value
One of the biggest mistakes a new homeowner can make is not having enough coverage. When insuring your home, you need to understand the difference between what your home is worth in the real estate market and how much it will cost to rebuild your home. The two amounts may be vastly different. However, it would be best to consider both values when you are buying your homeowners’ insurance. Take a few minutes to research your home’s value. It will help you get the coverage you need.
Make Sure Your Gaps Are Covered
Many homeowners are under the impression that their homeowners’ insurance covers specific types of damage, including that caused by hurricanes, earthquakes, floods, sewer back-ups, and mold. The problem is, these different types of damage are not always covered under a basic policy. To fill these gaps in insurance coverage, you need to purchase specialty policies that will provide you with the additional coverage that you need.
Don’t Settle for Cheap Coverage
Homeowners’ insurance offering cheap coverage will only cost you in the end. You may be able to save a few dollars, but the policy you get may not offer the coverage amount you need or the features you want. Therefore, make room in your budget for a modest premium. Paying a little more may get you a lower deductible, as well as a variety of features that will benefit you in the long run. Review your policies every year. Changes to your home and your neighborhood alter your premium. Additions to your home, like a finished basement or swimming pool, call for an increase in your policy to prevent you from being uninsured in case of a large property or liability loss. On the other hand, reducing risks on your property by adding a new fence or burglar alarm might lower your premiums.
Research and Compare Policies
When you bought your home, you looked at multiple properties and took the time to go through each one with a keen eye. You should do the same thing with every type of insurance policy you purchase. Buying homeowners insurance is no different. Every policy is different in terms of both price and features. Take the time to review each one closely. Check the deductibles. Find out how much it will cost to add any specialty policies you may want. Also, research the location and look into factors that may affect your premium, such as the neighborhood crime rate.
File a Claim Smartly
Keep records, document important conversations, and save receipts and contracts. Also, keep an inventory of your home. Try using an app or a website to keep track of your items digitally. While reporting a claim, have all of this information plus all other specifications about your house ready. Then file the claim within the filing time limit to ensure that your loss is suitably covered.
Pierce Insurance Group is a full-service insurance agency that offers a variety of policies. When it comes to homeowners insurance, our agents always try to keep the clients from making common mistakes. We take a little extra time with each client to go over each policy and ensure that all of the details are covered. Schedule an appointment so you can get a review of your policy. We are ready to get you started.