With the variety of insurance options it is easy to overlook some details or ensure that you have the best coverage for your needs. Home insurance protects one of the largest financial investments people make in their lifetime, just like any other insurance policy; there are ways to save some money. The following are the top ten mistakes and reasons people overpay on their home insurance policy.
1. Not Shopping Around for Home Insurance Quotes
Just like car insurance quotes, taking the time to shop around can save you money in the long run. Sites like InsuranceHotline.com will compare your rate against various insurance companies. Failing to compare home insurance quotes is very common, especially for new home buyers who are eager to complete the transaction quickly.
2. Using Multiple Insurance Companies
By separating home insurance policies from auto insurance, or other coverages, you could be missing out on large discounts. By combining various policies within the same insurance company, you will be offered bundled savings.
3. Not Reviewing the Home Description
Home insurance policies cover the specific details of a property. If the information provided to the insurance company is inaccurate, the rate can be incorrect. Take the time to review your property specifics to be certain you are providing the right information about your home. This also ensures you are covered properly.
4. Choosing a Low Insurance Deductible
Choosing a low deductible is personal preference, but it can be a way to increase your premium. Rule of thumb in the insurance world is the higher the deductible the lower the premium, and in most cases it does not need to be much higher. Over the long term, higher deductibles save you more money in cases where there are no claims.
5. Paying Too Many Fees
It is common for insurance companies to charge a fee for monthly billing, but no fee when the annual premium is paid in full upfront, they sometimes even offer a discount for full payments. There may also be fees added if they mail out invoices as opposed to setting up pre-authorized payments.
6. Missing out on Insurance Discounts
Some home insurance companies will offer discounts for security additions to your home, but they need to be installed and the insurance company be informed of them. Ask for all available discounts and make sure everything is applied.
7. Failing to Consider Insurance When Home Shopping
In some cases for unique homes, it is best to obtain an insurance quote before buying. For example, some homes that are built with unique construction materials can have an impact on insurance rates. Obtaining a quote prior to purchasing will allow you to budget accordingly.
8. Confusing Market Value with Replacement Cost
The replacement cost for the building on a home insurance policy does not provide coverage on the land the property sits on. The land is covered by the liability section of the policy. Ensure that you are not paying for coverage on the value of the land, and only for the replacement cost of the structures on the land.
9. Insuring What You Don’t Have
People often obtain policies with coverage for items such as jewellery or electronics, but then forget to remove them after they have sold them or no longer own them. Check the list of scheduled items periodically and remove items from your policy that you no longer require coverage for.
10. Having To Many Risk Factors
There are other risk factors that home insurance companies take into consideration that can increase your premiums. Things like particular types of household pets that are considered dangerous or smoking indoors are not favored. Combine a few risk factors together and watch your premium increase unexpectedly.
Hopefully these tips will assist you to keep your home insurance quotes lower and avoid making any costly mistakes.