When asking ourselves why it is necessary to have homeowners insurance and trying to find answers from specialists and long term experts in the field, we cannot ignore the conclusion that imposes itself. A homeowners’ insurance policy is necessary not only to be able to get a loan for purchasing a new house. Most importantly, we need it because it will keep us, the house and, to a certain extent, our family members and personal assets safe from a certain amount of dangerous situations that life throws at us.
Standard Policies and Taking Extra Care
A standard homeowner’s policy will protect the owner in the event of disaster, but, depending on the residential area, some owners need to close separate policies for earthquake or flood scenarios, under the regulations of that specific state or geographical area. Comprehensive lists of home coverage types explaining the protection they offer, together with home insurance policies plans and discussions can be found on lendingexpertblog.com. These experts also discuss some mistakes people should avoid when shopping for a policy. In the following, we take a closer look at what several professionals have to say about choosing the right policy, paying the right amount of money, and other aspects pertaining to home insurance.
Insurance mistakes that should be avoided
People don’t know what exactly they sign for
However superficial this may sound, few people actually read and acknowledge what they are signing and paying for. If you think that this happens only when checking the Agreement Terms and Conditions box, whenever we install new software on our computers, the sad conclusion is that we pay little attention to the content that we seem to agree and pay for. The specialists’ recommendation is to clearly understand each type of coverage, irrespective of whether it is for personal property insurance, medical insurance or home insurance. Also, you have to be fully aware of what the policy covers and what extra precaution measures you have to take. By not reading carefully and clearly understanding what their policies cover or not, people face the complicated situation of having their insurance claims denied because those they claimed coverage for aspects were not covered after all.
Under-insuring and over-insuring
These are two extremes, but unfortunately, they are very common among home owners. Underinsurance was found in 2009 as affecting two thirds of the U.S. homes, according to a report cited by Forbes Magazine this year. Underinsurance is the result of homeowners not evaluating their homes properly: they either insure to cover the mortgage or equal to the house’s market value. But this is a mistake, specialists say, as the real estimation of a house’s value should be performed by a specialized construction builder, with an eye even for special design features, labor work costs to rebuild the house and the real estate market’s trends.
Over-insurance occurs when people need to be safe no matter what and are willing to pay for high premiums just to be sure. But experts also consider this to be a mistake, as filing an insurance claim every time you need to repair something in the house, from plumbing to window frames might determine the insurer to either increase the premiums or to deny claim. Appreciating the real value of the house and assets should be done regularly, while paying insurance coverage for repairs that can be covered in cash can lead to actually increasing the overall expenses for a homeowner.
Not paying attention to deductibles
Specialists from Forbes Magazine draw attention of a current mistake people make when signing up for a policy, and that is not being fully aware of their deductibles, as sometimes, under certain circumstances, they become percentages of the total coverage. Their example is quite self – explanatory: “if your house is insured for $300,000, but you sustain damage in a windstorm, you could be socked with a $15,000 deductible when you file your claim.” Before signing up, it is recommended to search for a policy that has a flat-rate deductible no matter what, although specialists warn that these policies are rare to find and more expensive.