While home insurance is a necessity, not every homeowner understands their exact insurance needs. This can lead to a lot of frustration. Below are three mistakes commonly made by homeowners when purchasing insurance. This article also provides advice as to how they can be avoided.
1. Underinsuring Your Home
When you speak with an insurance agent, you may assume that they're only in it for the sales and are trying to get you to buy unnecessary coverage. For the majority of agents, this is simply untrue and can lead to more harm than good.
If you think that the standard policy will protect your home from all possible damages, think again. While you'll certainly pay less per month with a standard policy, you may be in for a shock in the event that something uninsured occurs. When an agent mentions other policy options that may be right for you, it's important to do your own research and not assume they're overselling. If you live in an area prone to natural disasters, that earthquake or flood insurance they mentioned may not be such a bad idea.
2. Overinsuring Your Home
While coverage is a great thing, too much coverage isn't the way to go, either. Insurance, like all things, is best done in moderation.
When you overinsure your home, either by overvaluing the actual value of your belongings or purchasing coverage that you simply don't need, you're throwing money away. There are a few ways to ensure that you're purchasing just the right amount of coverage, including working with an expert assessor to properly evaluate the worth of your belongings and working with an insurance agent who has experience in your area. You don't want to pay towards coverage that won't ever be used; this means it's important to speak with a trustworthy agent who thoroughly understands your needs.
3. Not Fully Understanding Your Policy Coverage
When finding the policy that's right for you, it's important that you understand the policy's coverage front to back.
A policy may seem perfect on the outside, but dig a little deeper and you may realize that it isn't exactly what you need. Your policy, for example, may state that it covers water damage. You live in an area with a lot of flash floods and assume that your policy will cover the damage caused by this. Read a little closer, however, and that water damage coverage only covers damages caused by burst pipes or leaking roofs, not acts of nature. When you fail to fully understand the policy you choose, you'll waste your money and time – this means it's important to take your time to understand exactly what you're purchasing.
It's important that you work with an insurance company you can trust so as to avoid all of the mistakes mentioned above. To learn more about policy options and which ones may be right for you, contact professionals like the Sunset Insurance Agency.