Top Homeowners Insurance Mistakes - Are you making the top homeowners insurance mistakes? We have a list of common mistakes people make when buying a policy for their new homes. You may be surprised on what it actually covers.
1. Not understanding the amount you are insured for. You are insured for the amount it would take to rebuild your house.
2. Not understanding what is insured. Remember, you are insuring your dwelling and its contents, not the land.
3. Buying inadequate coverage for your personal belongings. You can choose among “replacement cost,” “actual cash value” or “guaranteed or extended replacement cost” policies, according to the Insurance Information Institute (III). Actual cash value will replace your possessions minus a deduction for depreciation.
4. Forgetting to insure against damage from natural disasters. Disaster coverage is not included in a standard policy and must be purchased separately.
5. Assuming mold that results from water damage will be covered by home insurance. According to III, mold is generally not covered by a standard home policy.
6. You home business is not covered by standard home insurance.
7. Underinsuring your valuables. Art and jewelry, or anything else particularly valuable, should be insured separately under riders to your home insurance policy so that they are fully covered.
8. Not keeping a list of your belongings. If your property is damaged, you’ll wish you had a comprehensive home inventory of everything you own.
9. Lacking appropriate liability insurance. If you have assets and potential liabilities, like a swimming pool, consider an umbrella policy in addition to your home and car insurance policies. Read more about how umbrella policies extend your coverage.
10. Assuming your insurance will always cover dog bites. Some home insurers have lists of breeds and crossbreeds they will not insure or charge more for certain “biting” breeds such as pit bulls.
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