4 Mistakes To Avoid When Buying Homeowners Insurance for the First Time
Written by
Cynthia Measom
Edited by
Amber Barkley
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Homeownership is about more than making your monthly mortgage payment on time. It also involves protecting your investment and all that’s within. But choosing the right coverage is not as straightforward as you might think.
From paying too much for coverage to signing up with a shady company, here are some newbie mistakes to avoid when buying homeowners insurance.
Also, find out why you really do need homeowners insurance, even if it’s expensive.
Underestimating Coverage Needs
Michael Branson, CEO of All Reverse Mortgage, Inc., said it’s easy to pick a policy that covers the basics, but you should really consider everything you own and how much it would cost to replace it.
“When you’re in a new home, you’ll want to make sure that your belongings, like furniture, electronics and appliances, are all covered if something unexpected happens,” he said. “Also, consider the cost of rebuilding your home in case of major damage. It’s better to take some time to assess your needs carefully and possibly spend a bit more on premiums to ensure you’re fully protected.
“This way, if disaster strikes, you won’t be left dealing with huge financial losses.”
Not Paying Attention to Details or Fine Print
Branson acknowledged that it can be tempting to skim through the insurance paperwork, especially when you’re overwhelmed with all the steps of buying a new home. However, he said missing important details might mean you’re agreeing to exclusions or limits in your coverage that leave you unprotected.
“For example, some policies might not cover certain natural disasters, like floods or earthquakes, unless you add special coverage,” he explained. “Make sure you know exactly what’s covered, and ask questions if something isn’t clear. Taking the time to fully understand your policy now can save you from headaches and unexpected expenses down the road.”
Not Shopping Around for the Best Deal
“Just like with anything else you buy, getting homeowners insurance isn’t a one-size-fits-all situation,” said Branson. “Different insurance companies offer different rates and packages, so it’s worth your while to call around or visit comparison websites to see what’s out there. You might find a much better deal or more comprehensive coverage that fits your needs — and budget.”
Branson also said that you might be able to save more money if you bundle insurance policies, such as combining home and auto with the same company. “Taking a little extra time to compare prices and options can really pay off in the long run.”
Overlooking the Reputation of the Insurance Company
Branson pointed out that you shouldn’t only focus on getting the cheapest rate. Instead, he said it’s crucial that the company you choose is trustworthy and reliable — especially when you need to make a claim.
“Take some time to read reviews online, or ask friends and family for recommendations,” he suggested. “Companies with a strong track record of good customer service and prompt claims processing are worth checking out. You can’t predict when you’ll need to file a claim, but choosing an insurer with a good reputation can give you peace of mind, knowing that they’ll be there, ready and willing to help when you need them.”
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