NYC Insurance Blog

6 Mistakes to Avoid When Buying Homeowners Insurance.

Buying a home is an outstanding achievement. Unfortunately, that's not the end of your financial commitment. If you want to buy a home, you will navigate through the mortgage, property taxes, and home insurance. Purchasing homeowners insurance is a daunting task because you must get it right. Whether you are a new homeowner or want to review your current homeowners insurance policy, avoid making the following mistakes:

1. Underinsuring Your Home

Buying less coverage is cheaper, but if you file a claim, you may pay more out of your pocket. Although it can be tempting to pick a cheaper option, it is not worth the risk when disaster hits. If you want to lower your cost, get the right coverage and increase your deductible. Increasing your deductible is a guaranteed way of getting much-needed coverage at a reasonable rate. Let one of or Agents, help you understand your coverage - give us a call today!

2. Choosing the Wrong Insurance Company

Remember you are purchasing an insurance policy to protect your home, a valued asset. Therefore, take your time to ensure the insurance company is reputable and solid financially. Do your homework, shop around and get referrals from friends and colleagues. While choosing an insurance company, ask yourself the following questions:

• How is their customer service?
• How long have they been in business?
• What is their process of handling claims?
• Do they have good reviews and ratings?

3. Choosing Actual Cash Value, Instead of Replacement Cost Value

Purchasing a policy that pays out actual cash value instead of replacement cost value is an error homeowners make. The problem with this choice is the fact that your home or belongings will cost more to replace at the time of the loss. Your home market value can be higher or lower than its replacement cost. Ergo, it is not an accurate way of determining what the insurance company should pay after a loss. Homeowners should ensure they are protected from the ever-changing real estate market, i.e., have enough coverage to rebuild/repair their home or replace their belongings without paying out of pocket.

4. Forgetting About Discounts

If you do not research well, you can miss out on discounts. Did you know that you can reduce your premiums by installing smoke detectors, installing an alarm system, or bundling your homeowners and auto insurance with the same insurer? You could end up paying more for your insurance policy if you fail to consider available discounts.

5. Failure to Customize Your Coverage

We all have different needs. Therefore, always consider your home's unique needs when purchasing homeowners insurance. When buying a homeowners policy, you should consider customizing your coverage. For example, since homeowners insurance does not provide flood coverage, you should consider buying it if you live in a flood-prone area. 

6. Setting Your Deductible Incorrectly

Deductible refers to the amount of money you pay each time you file a claim. Most homeowners set their deductible either too high or low to save money. While this might seem like a good plan, it might end up hurting you financially. Setting a low deductible translates to paying more if anything goes wrong. On the other hand, if your deductible is too high, you will pay high monthly or yearly premium payments. Research and know which option works best for you. Weigh the two options and get professional advice to avoid making a mistake.

Knowing these common mistakes is crucial to help you purchase the right amount of coverage for your home. If you have any questions, talk to your insurance agent. Remember, if you choose the right homeowners' insurance provider, they will guide you throughout the process and ensure you get the right coverage within your budget.  Give Us a Call Today to Get a Homeowner's Quote for FREE.

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