Shopping for home insurance on your own can be overwhelming – terms and conditions, deductibles, coverage levels – what do they mean? How do you choose?
The first thing you need to understand when purchasing insurance is that there isn’t one size fits all - everyone’s situation is unique – including yours.
A licensed insurance expert can offer advice and expertise to help you make the right choices when purchasing the insurance coverage they need in case the unexpected happens. Having an insurance broker means you can avoid the common mistakes that people make when buying insurance. But, if you’re determined to purchase insurance on your own, it’s a good idea to learn how to avoid some of the common mistakes outlined below, so that you can ensure you’re well insured.
Mistake #1. Under-insuring yourself
Insurance is supposed to provide you with peace of mind knowing you are covered if the unexpected happens. One of the most common mistakes customers make is to reduce their coverage to save a few pennies.
When purchasing home insurance, you have to make choices, for example – do you choose $1M or $2M liability insurance? Should I pay for additional water-damage coverage? You may not realize the importance of these choices until you are in the midst of a claim and you learn the hard way that you didn’t have the coverage amount you needed!
When it comes to limits required for your personal belongings, how do you know whether they accurately reflect what you own? You may be surprised at how quickly items can add up. Creating a Home Inventory Checklist in advance can help you determine the amount of coverage you need.
Whether it’s liability or personal belongings coverage, invest some time researching the right amount for your needs.
Mistake #2. Choosing the least expensive option
You can shop online and find special offers and deals that seem almost too good to be true. Some companies advertise how much they can save an average customer but how do you know whether you and that ‘average customer’ have the same insurance needs?
You are an individual and your insurance policy should be based on your specific coverage needs! An ‘average customer’ price may not take all the coverages you need into consideration. Be sure to practice due diligence by comparing your options because if you need to submit a claim, you want to have the right amount of coverage in place and avoid unpleasant surprises.
When comparing policies, consider the following:
- Will the coverage offered get you back to your present state in the event of a claim?
- Do the quotes offer the same deductible?
- Are the coverage limits the same?
- Are certain risks included on one and not the other?
Mistake #3. Choosing a higher deductible to save on the premium
A deductible is the amount of money you pay in the event of a claim, before your insurer pays its portion. It’s true that choosing to have a higher deductible can help reduce your monthly premium, however, what if you have a claim during a period in which you can’t afford to pay the deductible amount?
For example, what if your roof is damaged in a storm and you have to pay a $2,000 deductible towards the repairs but you can’t cover it at that time? It doesn’t matter that you saved some money on the premium because now your roof repairs will be delayed until you can pay!
Pick a deductible you can afford no matter what the circumstance because you may have to pay if the unexpected happens!
Mistake #4. Not understanding value of an insurance broker
There is a common perception that doing everything online yourself saves you money – booking a trip vs. using a travel agent; selling your home vs. using a realtor, and buying insurance instead of using an insurance broker. But what happens when the discount airline you booked goes bankrupt and you’re stuck overseas? If you used a travel agent, they could help.
What happens if the buyer of your home sues you for an undisclosed problem? This may have been avoided if you used a realtor.
What if you didn’t purchase the right home insurance coverage and now you’re facing a considerable loss? Did you know that it doesn’t cost you anything to use a licensed insurance broker? In fact, a broker can save you money; they have the expertise to offer advice, and they offer the added bonus of customized service while finding coverage that fits your specific needs!
Whether you need insurance for your home, vehicle, business or more, a licensed insurance broker can customize a solution based on your needs. Most brokers live and work in the communities they serve so they know what kind of insurance you need because your needs are similar to theirs.
Your insurance policy can be dozens of pages and it can be overwhelming to read and understand it all. An insurance broker will take the time to go over every detail with you to make sure you understand everything – to truly offer you peace of mind.
How to avoid common home insurance mistakes
All of the mistakes outlined in this article can be avoided by one simple solution – using a licensed insurance broker.
It’s easy to get in touch with one of our brokers: