When it comes to buying house insurance, you likely have numerous options to choose from and the goal of finding the least expensive policy you can. That in itself would be a big mistake. The right home insurance policy for you needs to address all of the risks your property faces and, perhaps most importantly, it needs to focus on providing you with peace of mind. What are the most common mistakes people make when buying house insurance?
#1: Not Having Enough Coverage
Underinsuring a home is a very common and very risky matter. If you do not have a high level of coverage in place, even if you have an active policy when a storm hits, you could be losing out. Do not take out just enough insurance to cover the amount of your mortgage. Most mortgages are only for 80 to 90 per cent of the property’s value, leaving you to foot that remaining 20 per cent yourself out-of-pocket for losses.
#2: Believing You Have Flood Insurance
A secondary risk that’s quite common is assuming you have flood insurance. The average home insurance policy does not cover floods. If you live near an area that may flood, such as a high-risk zone, you likely don’t have insurance if you only have a standard house insurance policy. However, should a flood occur, your home could sustain significant damage. What can you do? Purchase a rider or additional flood insurance policy that shores up any weakness in your current policy to minimise risks and costs.
#3: You Haven’t Found All of the Savings Available to You
You could be missing out on key home insurance discounts if you have not asked for them. Many people do not realise just how many discount opportunities are available for items such as home security systems, installing deadbolt locks on the home, installing a monitored home security system, having a fence around your property, and even just living in a safe city. If you have yet to do so, request that your insurer take a closer look at the potential savings opportunities available to you and adjust your policy (or secure a new one) to keep your costs.
Are you making these mistakes with home insurance? The good news is you can search for a new policy and secure a lower cost offering or update your existing policy for more affordability.