Making mistakes with your homeowners insurance can end up costing you a lot of money, both in terms of your premiums as well as when it comes to making a claim. The following are five homeowners insurance mistakes that you should avoid in order to ensure your homeowners insurance safety:
- Insuring for real estate value - Real estate values go up and down. If your property values goes down, then you'll lose money if your home is destroyed. Insure your home for the cost of rebuilding instead so that you can replace your house if you have to.
- Choosing your insurer based on price - Getting affordable premiums is important, but so is working with a financially sound insurer that provides good customer service. Look into the reputation of an insurance company before choosing to work with them.
- Dropping flood insurance - You may decide you don't need flood insurance because you live in a low risk area. But 25 percent of all flood losses actually occur in low risk areas.
- Making your deductible too high - A higher deductible means lower premiums. But you don't want to make your deductible so high that you won't be able to pay it - or that it will really put a dent into your finances.
- Assuming you're covered - Go through your insurance policy to understand what is and isn't covered and purchase additional coverages if you think you need them.