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Common Homeowners Insurance Mistakes

homeowners insuranceHopefully, you will never need to file a claim on your homeowners insurance. This can often mean you’ve endured a catastrophic loss and out, so that you don’t have any unpleasant surprises when you need to file a claim.

Make sure to know which types of loss are covered under your insurance policy. Contrary to common belief, homeowners insurance usually does not cover every type of loss. Your home may be covered in the event of a fire, for example, but earthquakes or flood insurance may have to be purchased separately. If your home sustains damage due to an event which is not covered by your insurance policy, you’ll be solely responsible some pretty significant repair bills.

One of the most important things to know is the amount of your deductible. As with any type of insurance policy, a larger deductible means a smaller premium payment. Homeowners often opt for the lowest possible premium, but then when they need to file a claim they discover the deductible (the amount they must pay before their loss is covered by insurance) is far more than they can actually afford. Be sure to keep that amount of money in a savings account, just in case, or purchase a policy with a smaller deductible.

Finally, make sure you purchase enough homeowners insurance. Remember that if you suffer a catastrophic loss of your home, you will probably lose all of its contents as well. You might also need a place to stay while you rebuild your home or shop for a new one. Be sure that your policy is worth enough to cover contents and replacement housing, so you can get your life back on track as quickly as possible.