Looking to buy a home insurance policy? Here are a few dos and don’ts to keep in mind.
Dos
Realize that Underinsurance Is a Common Issue
Many homeowners find themselves facing problems with claims due to being underinsured. To avoid being in this situation, make sure to get adequate coverage. While no one wants to overpay for their home insurance policy, being underinsured can cause you significantly more expenses if a disaster strikes.
Maintain a Security System
Having a burglar alarm that is monitored by a company will help you receive more competitive premium quotes. Smoke alarms are another thing you can consider installing. While it is standard in pretty much all modern homes, installing them in an older home can save you at least 10% or more on your premiums.
Plan Ahead for Renovation
Adding a structure, like a swimming pool or garage, can increase the cost of your policy. In general, if you build a wood-framed structure, you may have to pay more for your policy because the material is very flammable. Structures like swimming pools increase the value of your property, which proportionately increases the cost of your policy.
Dont’s
Raise Your Deductible
The higher your deductible, the lower will be your annual premiums. This makes it very tempting for homeowners to increase their deductible. But the problem is that if you file a claim, you’ll need to shell out a lot more money if you have a high deductible. If you are unable to cover such expenses, avoid raising your deductible. You’re better off paying a slightly higher premium than incurring significantly more out-of-pocket costs.
Understate the Size of Your Home
Understating the size or amenities you have in your home can help you get a lower premium. That said, you may not receive full coverage when you file a claim. Some insurance companies may even deny your claim completely.
Be Afraid to Switch Insurance Companies
Loyalty does not really benefit you in this scenario. Insurance companies try to undercut each other by offering discounts to new customers. So, it is in your best interest to compare new options in the market from time to time.