If you’re in the process of purchasing a home, it’s likely that you’ve already started looking for a home insurance policy. However, if you’ve never purchased home insurance before, buying the right plan can seem difficult, given the number of coverage options out there and the jargon-heavy content that’s put out by insurance companies. So, we’ve listed a few dos and don’ts to help you pick a home insurance plan.
Dos
- Understand that underinsurance is a problem: Many homeowners find themselves grossly underinsured after a total loss despite having followed their insurance company’s recommendations. If this happens to you, you’ll need to know what your rights are. Make sure to check the fine print in your policy document regarding this.
- Get in touch with an independent agent: An independent agent is someone who is not affiliated with a particular company. Hence, they will be able to give you impartial opinions regarding which policy you should buy.
- Get full replacement coverage: Make sure to get full replacement coverage so you aren’t underinsured in case of a total loss.
- Answers the insurance company’s questions honestly: Insurance companies may ask you questions about the size of your home, construction style, renovations that were done, etc. Make sure to answer these questions honestly.
- Increase or maintain coverage limits as needed: From time to time, you’ll need to review your policy’s coverage and either maintain the same coverage limit or increase it.
Don’ts
- Don’t opt for a policy based on the sale price of your home: Don’t make the mistake of opting for coverage equal to the purchase price of your home. Ensure that the coverage amount is equal to the full replacement cost.
- Don’t get the cheapest policy: Avoid getting the cheapest policy since it is likely you’ll have to compromise on coverage.
- Don’t understate the size of your home for a lower premium: Never lie about any details on the application form just to secure a better premium quote.
- Don’t underestimate the value of your possessions: In case your assets are stolen or damaged, you’ll receive better coverage if you give your insurance firm the accurate value of your possessions at the start.
- Don’t hesitate to switch to a better company: If you are unhappy with the policy’s coverage or the service offered by the insurance company, don’t hesitate to switch to a different firm.
