Top Seven Mistakes People Make When They Buy Homeowners Insurance
Ray Cogan
Avoid these snafus when you purchase your homeowners insurance!
Your home is the most expensive asset you own. You keep your personal property there, which could be worth thousands of dollars. But, most importantly, the people you love live there. Your home is the most important place in your life. ***
So, when it comes to covering your home, it needs to be done with knowledge and insight. A home that is not covered correctly by insurance can cost the owner thousands of dollars and personal property can be lost forever, never to be replaced.
Unfortunately, there are mistakes that homeowners make when getting coverage. Here are some of those typical mistakes:
1. Underinsuring your home. No one wants to pay more for insurance than they have to-it gets expensive. What’s even worse though is underinsuring your home. Not having enough coverage means that if there is a loss, you will have to pay the deductible along with whatever gaps in your insurance policy. The best way to make sure you have enough coverage is to customize your policy based on the year built, square footage, type of construction, and any other detached buildings on the property. Your insurance agent will help you correctly cover your home.
2. Setting your deductible too high or too low. Your deductible is the out-of-pocket amount you’re responsible for paying before your insurance then begins to pay for the loss. The higher your deductible, the lower your premiums.
3. Being satisfied with only the basic policy. Some people believe that they have all the coverage they need with only the basic coverage. The standard homeowner’s policy protects your home from fire, wind, rain, burglary, and a few other losses. Earthquakes and floods are not covered under this type of policy. You would need to get a separate policy for it. Maryland residents who live in flood plains or near the coast are required to get coverage.
4. Assuming that your home business is covered under your homeowner’s policy. Business property and liability are not covered under your homeowner’s policy. Any loss to them is excluded. Plus, not informing your insurance agent of the home business may be considered “material misrepresentation” and could nullify your entire homeowner’s policy. Inform your agent of your home business so you can have it covered under an endorsement (if it is eligible.)
5. Assuming a standard policy will cover mold or sewage backup issues. Homeowners’ policies don't offer this coverage. If they did, insurance companies would go out of business.
6. Buying only the required liability insurance. Your liability coverage protects you should guests be injured on your property. It also covers you if your dog bites them or someone slips on the outdoor steps. The typical homeowner’s policy includes this type of coverage. Most insureds get only a minimal level of insurance. Due to the high legal and medical costs, it’s recommended that liability be no less than $300,000.
7. Not taking time to do an inventory of your personal property. Most people acquire a great extent of property over the decades. That property may include high-priced jewelry, artwork, antiques, or collectibles. Your homeowner’s insurance may not fully cover these items as there are limits on these. You need to get a special personal articles policy.
Now that you know the typical mistakes some homeowners make, you can avoid them by talking with your homeowner’s insurance agent. It may take extra time and expense, but you will be fully covered and save a lot of money and heartache in the long run.
Lindquist Insurance has an experienced and licensed staff who can consult you on the best homeowner’s insurance
coverage for you and your family. Call (301) 694-0008 for a consultation. We serve the Frederick, MD, and Annapolis, MD areas.
*** Visit the State of Maryland website
to find out more about homeowners insurance rates and coverages.
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