Finally, you want a home insurance policy? Well, congratulations. That’s a good step. At least, you value your home. You understand the importance of a home insurance cover. However, purchasing a home insurance policy isn’t a joke. It comes with a lot of steps and processes. Plus, you must take into consideration a number of things. Even more, you must carry due diligence to avoid making common insurance mistakes. Avoid the following home insurance mistakes and be on a safer side.
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Don’t Insure Your Home-Based on the Real Estate Value
When real estate prices drop, you may think that it’s better to reduce the level of insurance coverage on your home. But home insurance is typically designed to cater for rebuilding costs, not the sales price of the property. Ensure that you’ve adequate coverage to rebuild your house and replace all your belongings. And the best way to achieve this is by raising your deductible. Increasing it from USD 500 to USD 1,000 could save up to twenty-five percent on your premium payments.
Don’t Just Look at the Price
When shopping around for home insurance, it’s always advisable to stick with companies that offer competitive prices. Make sure that the insurance provider you choose is financially stable and provides excellent customer service.
Don’t Drop Flood Insurance
Damage from flooding isn’t usually covered under standard homeowners’ insurance policies. This type of coverage is offered by the National Flood Insurance Program (NFIP) and certain private insurance companies.
Before purchasing a home, consult with the NFIP to establish whether the property is situated in a flood zone. If that’s the case, you may want to consider investing in a less risky area. And if you’re already residing in a designated flood zone, check out for mitigation efforts that can minimize your risk of flood damage.
Don’t Just Stick to the Legal Amount of Liability
Purchasing only the minimum amount of liability implies that you’re going to pay more out of your pocket later on. And if a lawsuit is filed against you, those costs could end up jeopardizing your financial well-being.
To avoid such inconveniences, consider dropping collision or comprehensive coverage on older vehicles worth less than 1,000 dollars. Most insurance providers generally recommend a minimum of 100,000 dollars of bodily injury protection per individual and 300,000 dollars per accident.
Don’t Forget to Purchase a Renters Insurance
Renters insurance covers your possessions as well as any additional living expenses in case you’ve to move out because of an insured disaster, like a fire or hurricane. Plus, it offers liability protection when someone gets hurt in your home and decides to file a lawsuit against you.
Don’t make the above grave mistakes when purchasing a home insurance policy. Making these mistakes can be costly. Do your research and purchase the right insurance policy. With the right insurance policy, you are assured of the peace of mind to carry on with other daily activities.