Common Mistakes While Choosing Home Insurance

Common Mistakes While Choosing Home Insurance

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If you are in the market to get a new home insurance plan, be sure to watch out for these common mistakes.

Your home is one thing that is very likely to be the biggest investment you have made. Naturally, you would want to protect your home. This is the one single investment that is likely to be the most important investment you have made. It is logical to want to protect that investment. Home insurance is then vital to your needs and frankly requirements. You would want to make sure that in the case of an unexpected event befalling you, such as heavy flood and fire, you are well covered.

We hope that these tragedies do not fall on your shoulders but statistically speaking, and for the peace of mind, you should have your home insured. It should not be just any old home insurance plan but one that has been thoroughly looked into and one that covers all your insurance needs. The common mistakes that you want to watch out for are listed below:

Insuring the Value According to the Real Estate

When a tragedy falls upon a homeowner, the costs incurred in repairing the house back to its original glory may very well be more than the cost of the home when it was originally bought. If the insurance coverage is valued upon the mortgage of the house, it very likely won’t cover the complete cost of rebuilding. The factors that will influence the type of coverage you could need are as follows:

The Cost of Rebuilding

When measuring the cost it may be a good idea to multiply the nearby construction cost by the square footage of the house can be a good indicator of the costs. Some other very obvious factors that would also influence this are the type of materials you choose, the design and layout of the home etc. If you don’t determine the costs properly, even large loss adjusters might find it difficult to get you a good settlement.


In case of a very tragic event happening, you want to make sure that the valuables you have in the house are also covered by the home insurance plan.

Probable Living Expenses

If you are one of the unlucky ones who experience such a disaster that it forces you to move out of the house, well in that case, you will need some living expenses till your house gets pulled back together. Things to include here include the price of hotel rooms and food.

Liability Insurance

This is the type of insurance that will help you against lawsuits in the event that someone in your home suffers any kinds of accidents that may physically or otherwise harm them. It is a very good idea to get liability insurance in the range of 300,000 – 500,000 USD. That is usually the amount that is recommended for liability insurance coverage.

Do Not Just Select The Cheapest Possible Option

Please note that the companies that offer the cheapest premiums are most likely to not have the financial power to provide full coverage in the event of a big claim. A lot of research is recommended here, there are independent agencies that rate insurance companies and you should definitely make the most use of this service.

Get Flood Insurance

Many homeowners often do not know that damage incurred by flooding may not be covered by their home insurance. Research states that even an inch of water can be as expensive as 25,000 USD to fix.

These are some of the most common mistakes that homeowners make when getting insurance for their homes. Make sure you do not make the same mistakes.