5 Home Insurance Mistakes That Could Cost You Big

Home Owners InsuranceYour property might represent the greatest financial commitment you’ll ever make, so it’s vital that you have suitable insurance in place to protect it.

The trouble is, it’s all too easy to make mistakes when arranging this coverage. Stay savvy when choosing your insurance. Here are five potential insurance pitfalls that could end up costing you big.

1) Failing to Shop Around for the Best Deal

If you lead a busy life, the last thing you’ll want to do is devote hours on end to seeking out the best possible insurance deal. For this reason, you might be tempted to simply go for the first offer you find, or to renew your existing policy time and again. However, failing to shop around could put an unnecessarily large dent in your finances. Bear in mind that you don’t have to scour the market yourself to access competitive premiums. By heading to the websites of specialist brokers like Chill, you can ensure the process is quick and simple. You might be surprised by how much cash you can save if you’re savvy when searching for your policy.

2) Making Assumptions About Your Level of Coverage

Another mistake you’ll do well to avoid is making assumptions about the level of cover that comes with your policy. Often, people think certain features of home insurance are included as standard when in fact they’re optional extras. For example, your policy might not feature accident damage protection. In fact, fewer than one in five home cover agreements automatically protect holders for damage they cause themselves by accident. Rather than guessing what’s included in your insurance, make sure you read the small print.

3) Slipping up on Security

Be careful when it comes to security too. The quote you receive from your insurance provider will in part be determined by the home security measures you have in place on your doors and windows. If you fail to get safety systems like key-operated window locks or mortise door locks, you’ll end up shelling out more than you need to for your cover. Even worse, if you accidentally or intentionally mislead your insurer by suggesting your security measures are better than they really are, you risk invalidating your policy.

Preparing For Homeownership [RetirementSavvy]

4) Underestimating the Value of Your Possessions

It’s also important to watch out when you’re valuing your possessions. Studies frequently show that consumers underestimate the worth of their home contents. As well as physical possessions, think about your digital downloads. Would your insurance cover any lost video and MP3 files as well as hardware in the event of damage or loss to your computers and other devices?

5) Forgetting to Update Your Policy

Another insurance slip-up to avoid concerns forgetting to update your policy when your circumstances change. For example, if you acquire new items, make sure your cover is adjusted to reflect this. Bear in mind that objects of value might need to be insured separately. All too often, people wait for their policy renewals to update their cover details, and this approach can leave them out-of-pocket.

By making sure you steer clear of home insurance mistakes like these, you should succeed in arranging the perfect policy for you and your property.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

6 Comments

  1. Inquire about additional coverage for protection from mold or sewage backup. So, assess your risks to determine if you need mold protection. Despite the high cost, mold coverage could be a worthwhile expense since the cost of removal is quite high. And insurance, after all, is to protect you against large expenses. Great content and tips. Thanks!!

    • Good point, Lynetta. Thanks for taking the time to stop by and add to the conversation.

  2. Many insurers will give you the multiple policy discounts. Our homeowners policy is less than 300.00 per year for very good coverage because we have our vehicles with them as well. At the very least it is worth looking into.

    • Indeed, Brad. And of course, every dollar saved on on homeowners insurance can be applied to an emergency fund or retirement account. Thanks for stopping by and joining the conversation.

  3. My husband and I should definitely update our insurance. It has been seven years since we moved in and we have done many upgrades. I believe we underestimated the amount of possessions as well. Great article, Savvy James. This is something that people just something about with the hustle and bustle of today’s life.

    • Staying on top of your insurance needs is absolutely a requirement for being a savvy consumer, maximizing the value of your hard earned money and putting yourself in a better position for a better retirement. Thanks for stopping by, Karen.

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