Homeowner's Academy

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Mistakes to Avoid When Purchasing Home Insurance

by BROOKE GOLD HASSON | Nov 04, 2013

subdivisionPurchasing homeowners insurance can be confusing and frustrating. But, it doesn’t have to be. With People’s Trust Insurance Company you have the option of going direct or calling an agent to help walk you through the process. We have put together some common mistakes to avoid to help you better educate yourself prior to purchasing insurance. If you’re looking to make the switch, shopping around, or just educating yourself - you have come to the right place. Take a look at the following tips on mistakes to avoid when purchasing home insurance.

  • Only sign up with a reputable company that is rated by a reputable rating agency such as Demotech or AM Best. Check the financial health of a company with independent rating agencies.
  • You should make sure that you have enough coverage to completely rebuild your home and replace your belongings. You should not insure your property for the real estate value. Insurance is designed to cover the cost of rebuilding, not the sales price of your home. Consult with your insurance agent regarding this. The best way to save money is to increase your deductible, which could end up saving you a significant amount and not affect your coverage. To clarify, the higher your deductible the more money you save on your premium. Your deductible is the amount you have to pay out-of-pocket in the event you have to file a claim before the policy will kick in. The more you are willing to pay, the more you can save on your premium.
  • Don’t skimp on additional coverage or insurance types that are not included in home insurance. For example, flood insurance is almost always not included in home insurance policies. One of the biggest mistakes that most homeowners make is thinking that their home insurance policy covers flood. Unfortunately, they often find out the hard way that they do not have the coverage that they truly need. Keep in mind that just because you are not considered to be in a flood zone doesn’t mean you cannot experience a flood. All of Florida is considered a flood zone.
  • Add coverage for items that you need to insure. Don’t forget to insure the items that are of value to you that are not automatically included in your insurance policy and may require additional coverage options - for example, jewelry, art, and other collectibles. Speak to your agent about what you have and what may or may not require additional coverage and if they make sense.

Disclaimer: Always consult with an insurance agent/specialist on what is best for you and your home. This article is meant to provide you with ideas on how to save money and avoid mistakes, it is not meant to provide you with insurance advice or replace your agent's advice.