After choosing your new home or leaving your previous insurer, the next big step is making sure that you get the best home insurance. And when I say best, it means the one that fits your needs. Now, in order to do that, there are Do’s and Don’ts that you need to consider. Remember, you are insuring one of your biggest investments. So, take your time in looking for the right homeowner’s insurance. Don’t just look at the price, instead aim for the value.
Ever wonder why there’s a saying Good work ain’t cheap? Most probably you already know the answer. You can buy a cheap bag, but you can surely expect that it won’t last long. Also, you are also aware that the materials used are low-grade, right? You might be thinking that it’s okay if the bag will just last for a year or so. You will just buy a new one. But choosing the right home insurance is different. You can’t just replace a home in case of a total loss just like how easily you can replace a bag. Hence, you need to make sure that your decision in choosing your home insurance is the best option there is.
Here are the dos and don’ts that you need to keep in mind while shopping around.
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Dos in Choosing Home Insurance
1. Know your policy and its limits.
Knowing the policy limits of your insurance is a must. By doing this, you will be able to know what is covered and how much. Also, if an accident happens you can easily determine if you can file a claim or not. If you want to know the coverage of Homeowners Insurance he is the detailed information you must know What Should Homeowners Insurance Include/Cover?
Generally, homeowners insurance will cover the damages due to appliance breakdown, stuff that is lost during the move-in process, and burglary. However, there are exemptions. Here is the list of the exclusions most insurers have:
● Expensive possessions – Over-the-top and fragile belongings should have a separate policy. For example, painting, high-end entertainment systems, jewelry, furs, and personal collections. Although most of the contents of your house are covered, too expensive stuff needs to have additional protection or an umbrella policy.
● Damage caused by accidents – In most cases, a standard policy will not cover accidental damage due to negligence. For example, you forgot to turn off your grilling stove which causes a fire in your backyard. This kind of accident will not be covered by your insurer.
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● Natural disasters – If you happen to live in a peril-prone area, you might need to add a separate coverage. Because insurance companies tend to stop offering policies in houses that are at risk. A good example is a wildfire peril. Some insurers are no longer offering any home insurance to homes that are located in wildfire-prone areas. In his case, homeowners who wish to have their house insured can choose the option of using FAIR.
Fair Access to Insurance Requirements Plan or FAIR is a state-mandated program. This gives homeowners that are living in high-risk areas access to insurance.
● Pollution and hazards – Damage caused by harmful chemicals from a factory or warehouse located near your house is not covered. In case this incident happens, you need to file a complaint or take legal action. The owner of the company should be the one who will pay for the damages to your property.
● Intentional damage – Any damage that is deliberately done won’t be covered as well. So for example you had a huge fight with your partner and you hit the wall. That kind of damage will not be covered by your home insurance since you intentionally damage your property.
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2. Secure your home
Adding security features to your house can not only keep your family and investment safe. It is also a good way to lower the amount of your insurance. So consider adding an alarm and security code on your doors. Remember, the safer the house, the less chance for you to get robbed and experience a crime. To know more about security options, you might want to know this. Home Security and Things to do Before You Leave your Home
3. Keep a well-maintained home
As you already know, negligence is one of the top reasons why a claim can be denied. Therefore, regularly checking your house is a must. Any small leaks can lead to big trouble if neglected. So, make sure to inspect every part of your house from the roof to the basement. Be vigilant in looking for any signs such as molds on the ceiling, walls, corners of your house, and most especially the pipes. Water pipes tend to get old easily after years of usage. In order to avoid any leaks, check the pipes or have someone professional do it for you if you are not sure what to do.
4. Consider getting a Comprehensive Coverage
Most mortgage lenders will require you to have comprehensive coverage. It is because it not only covers your home but also your family, possessions, and personal injury in case someone got hurt or injured inside your property.
5. Keep a record of your belongings
Making a list of all of your possessions is a must! It is very important for this can save you from a lot of trouble in case of a total loss. Keep all the receipts and confirmation copies of your purchases. It can make the investigation easier and faster since you already have the documents to support your claim. Moreover, if you have the list, you can easily calculate how much your house and possessions are worth. That being said you can have a more accurate amount. Because that is what you need to know so can insure your house for the right amount and avoid being underinsured.
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6. Ask about bundling insurance and discounts
Bundling your home and auto insurance under the same company can save you money. Some insurance companies offer discounts if you bundle your insurance with them. Another good thing about that is insurers tend to keep their loyal customers. So you can be more at ease that they will less likely cancel your insurance and you are more eligible for renewal. If you want to know about discounts that you can get on your homeowners’ insurance, you might want to check this: Discounts for Home Insurance and What is the Benefit of Packaging My Auto and Home Insurance?
7. Try adding Additional Living expenses or ALE
Generally, insurance companies will require you to use your ALE for 12 to 24 months after a loss. If the given timeframe is finished and your house is not yet done, your insurers cannot cover your expenses any more. However, each company has different offers, some can cover you for 12 months, and some are for 24 months. That being said, you need to make sure that you shop around for the best insurance company that offers the best coverage, especially during a total loss.
Don’ts in Choosing Home Insurance
1. Don’t think that the cheapest home insurance is always the best choice.
Who doesn’t love to save some cash? Of course, we all do! But everyone has a different kind of living. If you have a huge house with expensive possessions, do you expect to have the most standard home insurance? Do you think you will be properly covered? Now, let’s say you just have an average size home with minimum personal stuff. You might say you’re already good with having just the standard policy. But have you inspected if your house has some leak issues or if your roof is too old to carry heavy snow during winter?
Always make sure to double-check your property’s value for you to determine how much you should insure your home. As you have read earlier, make a list of your possessions for you to have the right value for your home. Once you know the right amount, you can now properly insure it, and being underinsured can be less of a worry.
2. Don’t neglect every piece of your possessions.
Underestimating the amount of your personal property is one of the biggest factors why a homeowner becomes underinsured. You might think that you don’t need to record and include small things like utensils, vacuums, bedding, toiletries, curtains, and even rags. You will be surprised how much all of your stuff will cost if you’re going to calculate them all. In case of a total loss, you will need to buy all of that stuff again. So, if you don’t include that on the calculation of your house when you insure it, expect that you are already underinsured.
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3. Don’t underestimate the coverage of an umbrella policy
From what you have already read about the things that you need to do in getting home insurance. If you have over-the-top possessions, you should consider getting an umbrella policy. You might think that you don’t need it because you are living in a safe neighborhood. And getting robbed is almost impossible. However, we can never be too sure about what can happen. The only thing that we can do is be prepared in case of an incident.
Moreover, your standard homeowners’ insurance can only cover the maximum limit. Any amount more than that is not covered. So imagine you have an expensive set of diamonds that costs $7,000. if the maximum coverage of your home insurance is just $1,000, then that is just the amount that you can get when you file a claim. To know more about Umbrella Policy, check out this link Should I Get Umbrella Insurance? Is It A Must In The US?
4. Don’t hesitate to change your insurer.
Everything is indeed a trial and error. We can’t always guarantee that all can work just fine. This also happens in insurance. If you already tried your best to communicate with your insurance agent and still your concerns are not heard or simply they cannot give you the service that you need. Don’t hesitate to shop around. Other insurance companies are willing to provide you with service.
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