3 Mistakes To Avoid When Buying Homeowners Insurance
Your insurance is there for you when disaster strikes.
But more often than not, your coverage has limits that you didn’t realize are there.
Here are the top 3 mistakes to avoid when buying homeowners insurance, so you and your home can be better protected.
1. Under-insuring Your Home
Under-insuring your home is one of the most common mistakes you can make when purchasing a policy. So common that more than half of the homes in America are lacking needed coverages.
It’s easy to underestimate the replacement cost of your possessions or even what it would cost to rebuild your home. However, if you have a claim and you are under-insured, you’ll find yourself in hot water.
So why is this such a common occurrence? According to Forbes, most homeowners only buy enough insurance to cover the amount of their mortgage, which is only about 80 to 90 percent of the total value. Should your home need to be repaired or even rebuilt, you would also need to factor in the cost of labor and supplies.
To avoid this costly mistake, be sure to calculate your total replacement cost with your insurance agent or even contact a professional home-replacement cost estimator!
2. Assuming You Have Certain Coverage
There are several events and occurrences that are excluded by your standard homeowners insurance. Certain natural disasters such as lightning strike, hail damage and fires are included, but here are a few that are not:
Things such as floods and earthquakes are not part of a standard home insurance policy because most homes are not at a high risk of being affected by them, and sewage backups only tend to happen due to an old septic tank.
If you’re worried that your home is at risk for any of these damages, you should do your research. Find out if your home is in a flood zone or near a fault line, and check to see what sort of sewage system the house is set up on. Then you can add the appropriate coverage to your standard policy. Don’t wait till it’s too late!
3. Not Shopping Around
Did you know that you don’t have to buy your insurance from the company that your lender recommends? You should always shop around to find out what different insurers will charge you.
According to a survey taken by Bankrate.com in 2013, when quoted with several different insurance companies, homeowners’ policies differed by as much as 121% from the lowest to the highest quote. That’s a huge difference, and wouldn’t you want the best possible rate for your home? That’s why is pays to shop around!
Traps Avoided. Now What?
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