Homeowners insurance is undoubtedly complex. It’s full of legalese and hidden clauses that are difficult to comprehend. It’s no wonder that so many people choose inadequate coverage or are unaware of what their policy covers. But that’s where this article can help. Below, we’ve listed some of the most common mistakes homeowners make so you know what you need to avoid doing.
Assuming Flood-Related Damage Is Covered
Home insurance usually covers water damage caused due to things like a burst pipe. However, it seldom pays claims for water damage resulting from an external source, like a hurricane or flood. Long story short, if you live in a region that is prone to flooding, you’ll need to get a separate flood insurance policy or endorsement. It may cost a couple of hundred dollars more, but the additional coverage you get is worth the cost.
Not Comparing Offers
Home insurance premiums can vary from company to company. In fact, one insurer’s policy may cost more one year, compared to other insurers, but could drop significantly in price the very next year. This makes it vital for you to compare rates before deciding on a policy. When comparing plans, make sure you’re comparing apples to apples. While the premium is an important factor, you should also check how much coverage you are receiving for the premium. Remember, with home insurance, cheap is not always the best.
Choosing a High Deductible
Opting for a high deductible can help you save money. However, in the event of a claim, it increases your responsibility and saves the insurance company money. So, before you commit to a deductible, it’s important to do the math and figure out if the savings are worth it. At some point, the amount of money you save on your premium payments may not be worth it if you have to shell out a lot after a claim.
Not Informing Your Insurer of Big Changes
Certain changes in your life can impact your coverage and premium, so make sure to inform your insurer. For instance, dogs may be man’s best friend, but they increase the risk of a claim for your insurer, which, in turn, may result in your premium increasing. If you don’t let your insurer know that you got a new dog, your claim, especially one that may arise from the dog biting someone, may be denied.
