5 Common Mistakes When Shopping for Homeowners Insurance

Finding the homeowners insurance policy that’s right for you can be a challenging and confusing process. There are many variables to consider and comparing policies isn’t always comparing apples to apples. Add to that the increased pressure to obtain coverage before your closing date, and it’s easy to see why people make mistakes when buying homeowners insurance. Here are a few considerations to keep in mind when you’re searching for insurance for your new home.large house

Setting the right deductible

Your deductible is the amount you have to pay before your coverage begins. Generally, the higher your deductible the lower your premium. It is important to find the balance between the amount you can afford to pay versus the amount you could save on lower premiums. Setting your deductible too high may leave you vulnerable should a disaster strike.

Dismissing add-on protection

Most standard home insurance policies protect you from natural disasters, such as fires, hail and wind, but water damage from floods or sewer backups, as well as earthquakes and sinkholes are often not covered. Be sure to analyze your risk carefully before deciding pass on these add-on coverages.

Confusing replacement cost with value

Your home should be insured for the amount it would cost to replace it from the ground up, not the value of your home. What’s the difference? It may cost more to build your house from scratch than what your home is actually worth, especially if construction prices have gone up, property values have gone down, or if you have a lot of upgrades in your home.

Forgetting to cover specialty items

Account for all your high priced valuables and make sure they are covered. High end jewelry, collections, and other specialty items may be excluded from standard policy coverage and require additional riders.

Shopping only by price

It is tempting to compare policies based on price alone, but resist the easy way out. Weigh the pros and cons of each policy, research the company’s reputation, and compare the amount of coverage you get for the premium you pay.

We work with hundreds of insurance providers and can not only gather custom quotes for you, but help evaluate which company and policy is right for you. Contact us online or call 804-751-0600 to get started today.

7 Comments on “5 Common Mistakes When Shopping for Homeowners Insurance”

  1. Jamarcus Dantley

    You’re right, trying to find the property insurance that you need can be quite the process. We’re caught in it now and want to do it right. We like your first tip about making sure we get the right deductible. It’s important to weigh your current financial position to be able to make that decision.

  2. Nash Rich

    I thought these were some great points. I really liked the “dismissing add-on protection.” I was asking my dad what he has and a lot of it was for natural disaster stuff, that has never actually happened to us, but I still like the idea of having it. We are due for a really big earthquake in my area and I think it’s always better safe than sorry. Everything from this post was really great information. Thanks!

  3. Rockford Johnson

    Great post! Thank you for explaining the common mistakes that are made when shopping for homeowners insurance. I like how you explained that”It is tempting to compare policies based on price alone, but resist the easy way out. Weigh the pros and cons of each policy, research the company’s reputation, and compare the amount of coverage you get for the premium you pay.”. I have never shopped for home insurance before but reading this has really helped to know what to do to find the best insurance policy for me.

  4. Nathan Johnson

    These are great things to consider when buying homeowners insurance. My wife and I are considering purchasing our first home together. I am a newbie when it comes to these types of things, but reading this has helped. Thank you for clarifying the difference between replacement cost and value. I think in general, I realize that we just need to do our homework before selecting our insurance. Thanks for these ideas!

  5. Nash Rich

    I think doing add-ons is really important. Especially in areas that have specific natural disasters. I’ll never have flood problems, but an earthquake could happen any day, where I alive. Thanks for the info.

  6. Hazel Owens

    I like that you pointed out the importance of considering add-on protection to your homeowners insurance. It makes a lot of sense for someone in California to get earthquake coverage, for instance, but someone in Idaho may not need it as much. Like you said, analyzing your risk and weighing the cost of the insurance add ons should help you make the best financial decision. Thanks for the article.

  7. Kyle O'Ren

    I had never thought of covering for replacement cost instead of value. I had a friend whose house burned down and I think he was only covered for the value because he had to move. I’ll have to check with my insurance to make sure I’m covered to replace so I don’t run in to the same problem.

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