A standard home insurance policy will cover you for a range of damage, from fires to burglary. Do some comparison shopping, and you can get a policy that is just right for you. While at it, you will want to avoid some common mistakes when buying home insurance. Read on to learn more!
Assuming Cover for Natural Disasters
The standard home insurance cover doesn't include coverage for natural disasters such as earthquakes and floods. Don't assume that it does, or you will be left uncovered in the event of such incidents. You will need to get additional coverage by getting another policy or endorsement to ensure you are fully covered.
Not Insuring for the Proper Value
Avoid insuring your home for its market value. Instead, what you should do is insure it for its replacement value, that is, how much it would take to rebuild your home.
Home insurance providers consider several factors when calculating your dwelling value, which will inform the value for which you should insure your home. Some insurers also offer guaranteed/extended replacement cost add-on, which will absorb any spikes in home repair costs should these go above the value of your dwelling coverage.
Choosing a Higher Deductible
Going for a higher deductible will reduce the premiums on your home insurance. However, you have to consider the increased responsibility which falls on you in a claim. Unless you have enough savings or an emergency fund to pay for the losses out of pocket, then you may want to reconsider selecting a deductible that is too high.
If you are going for a higher deductible on your home insurance, consider putting the money you are saving into an emergency fund.
Going for the Minimum Liability Coverage
Liability coverage is easily the most neglected or overlooked element in a home insurance policy. This covers you for legal defense and settlements where you have legal responsibility and are sued for personal injury or property damage.
While there is no law regarding how much liability coverage you can have with your home insurance, more is always better. You will want to avoid going for the minimum coverage if people frequently cut through your property or you tend to host people a lot.
As a first-time homeowner, you may find yourself making some common mistakes when buying home insurance. Due diligence, researching, and talking to the right people will help you avoid these mistakes so you get the right cover and get the most out of it.
Contact an insurance agency, such as Oliveira Insurance Agency, to find the right policy for you.
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