When it comes to buying homeowners insurance, you want to work with trusted agents who will guide you toward the best policy for you and your family. Oftentimes, people look at their bottom line – how much will I pay a month? However, homeowners insurance is designed to protect you when you least expect it, and that might not always be the “cheapest” policy. As you are shopping around for the right homeowners insurance policy, consider these five mistakes people often make and do your best to avoid them. These common mistakes can easily cost you more money in the long run.
1. Buying Homeowners Insurance Based on Market Value and and Not Replacement Value
If something were to happen and you needed to make use of your homeowners insurance, you would need the payment to cover the costs of replacing your home or large portions of it – not what someone might pay if, for example, your home was for sale on the market. The market may value your home higher or lower than what insurance covers. It’s important to budget not only the monthly insurance premium but also costs above and beyond the replacement value of your home.
2. Not Shopping Around for Homeowners Insurance
The total cost of homeowners insurance can fluctuate from year to year. It is important to return to your policy and your insurance agent every couple of years to review your coverage and make sure it’s still adequate for your needs, along with checking for areas of potential savings. Remember that when you do compare policies, don’t compare based on price only – you have to compare coverage. Too many people find themselves underinsured after switching insurance policies based on price alone. This is one of the benefits of working with our agents at Jensen-Sundquist – we’re an independent agency and we write for over 20 different companies, so we do the shopping for you!
3. Choosing Too High of a Deductible
A low monthly payment seems tempting when you are trying to save and stick to a budget. However, choosing a high deductible to decrease your monthly payment may end up causing a bigger issue in the future if you do have a claim and are unable to afford your deductible. Choose a policy that you can afford – both the premium and the deductible.
4. Not Taking Extreme Weather Into Consideration
It’s important to ask exactly what your homeowners insurance covers. If you live in a flood-prone area, your homeowners insurance likely does not include flood coverage. Another example is heavy snowfall – some policies do not automatically include collapse caused by weight of ice or snow. These may be add-ons to your policy that make a big difference when preparing for the worst – after all, that is what insurance is for!
5. Not Updating Life Changes
There are a lot of factors that go into determining how much your homeowners insurance costs and what it covers. Getting married and doing a remodel are obvious reasons to contact your insurance agent, but did you know that certain breeds of dog affect your homeowners insurance as well? Insurance agents are there to help you and will make sure you are covered no matter what life change happens.
At Jensen-Sundquist, we do the hard work for you. Homeowners insurance can be difficult to understand and is something you don’t want to lack coverage for when you need it most. Make sure to consider all of the items above and don’t be afraid to ask us any questions you may have as you learn more about how your insurance coverage works for you. We’re here to help!