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7 Common Homeowners Insurance Mistakes and How to Avoid Them

There are over 82 million owner-occupied households in the US, and that number continues to grow. Buying a home is an achievement, but it is not where the financial commitment stops.

Most homeowners then have to navigate mortgages, property taxes, and find a homeowners insurance policy. While you often receive tax and mortgage guidance, finding insurance coverage can be a trickier task. And if you pick the wrong one, it can be a disaster.

So, how can you avoid homeowners insurance mistakes? The first step is to know the common errors homeowners make. Read on to learn the top seven homeowners insurance mistakes and how to avoid them.

1. Underestimating Coverage

One of the top homeowners’ insurance mistakes is not buying enough coverage. You want coverage to be enough in all situations. For example, if your home is destroyed, you want enough coverage to support a rebuild. There are many reasons your property could be destroyed, with thousands of homes being destroyed by wildfires alone every year, for example.

It can be a devastating mistake not to get enough coverage. While it can be tempting to pick a cheaper option and hope for the best, it is not worth the risk. Make the investment now so you do not throw away your hard work of buying a home.

2. Ignoring Insurance Terms and Conditions

Always read the fine print of your homeowner’s insurance policy. Never presume something like flood damage is covered. Consider the risks for your area and compare policies to see what should be included.

If something isn’t covered, add any additional coverage if you need it. And do not be afraid to question the insurance terms and conditions. You want to ensure they will support you in all circumstances and you need to make sure you are on the same page as the insurance provider.

Often cheaper insurance may seem appealing, but you will find issues when you check the insurance terms and conditions. Save yourself money and stress over the long run by understanding the policy so you can select the right one.

3. Setting a Low Deductible

The deductible is how much you pay each time you file a claim on your household insurance policy. Automatically picking a low deductible may appear cost-effective, but it does not always work out that way. A low deductible usually means paying a higher premium, which is the fee you pay for the insurance.

Take the time to consider what option works best for you. The biggest error is not weighing both options: low or high deductible?

A low deductible means you will have higher yearly or monthly premium costs to manage, so assess whether this financially makes sense for your situation. It might seem better if something happens and you will have to pay less out of pocket. But during years where you do not need to claim, a high premium will mean losing out financially.

4. Not Updating the Insurance Provider

Always update your insurance provider on any changes with your home. You will avoid any issues and might save money. For example, if you install certain safety features in your home, you can save money.

Potential safety features that help you save money include alarm systems, sprinkler systems, storm shutters, and carbon monoxide detectors. And these safety features all benefit you.

Preparation is better than reacting. After all, burglaries of residential properties account for 62.8 percent of all cases. So safety features such as alarms can reduce risks of break-ins, along with other reasons you may need to make a household insurance claim.

5. Forgetting To Do a Household Inventory

It may seem tedious, but without an accurate inventory of possessions, you might lose out on a claim. And you will end up spending a lot more money trying to replace items.

Commit time to make a household inventory now, so you can have peace of mind that everything is noted. You do not want to miss out on a claim or forget a valuable item that will then not be covered and replaced. Although some items are irreplaceable, your insurance provider needs proof of belongings to justify a claim.

6. Not Considering Insurance Bundles

When you research insurance policies, consider if you need other insurance policies too. For example, do you need auto insurance?

It can make life easier if you have policies with the same provider if issues arise. Otherwise, you will spend more time contacting different insurance providers.

And sometimes, you can receive discounts for bundling insurance policies. It is important to check with the provider regarding this option.

7. Not Researching the Insurance Provider

When you first move into a home, it is natural to want to relax and enjoy the space. But do not pick the first homeowners’ insurance provider that you find. Otherwise, you could end up with a policy that does not protect you and your home.

Take the time to research different providers and compare the cost of insurance options. The cheapest insurance or most expensive insurance is not always the best. The most important thing is that you find a reputable provider who can guide you to what you actually need.

Check independent reviews for the insurance provider and that they have the right licenses. It is surprising how often a company looks great on paper, but the reviews do not match their promises. Often providers offer free consultations so you can get a feel for their customer service and how they will handle your claim. Take advantage of this!

Avoid Homeowners Insurance Mistakes

Now you know the common homeowners insurance mistakes to avoid. Taking the time to research insurance options will save your wallet and home over time. If you pick the right homeowners’ insurance provider, they will guide you through the process and ensure your coverage is sufficient for your needs, while making sure you aren’t overspending.

Central Jersey Insurance Associates has been in business for over 50 years and is happy to help you with your homeowners insurance needs. Contact us today to schedule an appointment with our insurance agents.