When it comes to homeowners insurance, a minor oversight can become a major mistake that costs you dearly. From not choosing the right policy to failing to cover all the contingencies, the following are the most common home insurance mistakes. Knowing these can help you avoid a costly mistake should you ever need to file a claim.


Mistake #1: Insuring Possessions and Home For The Original Purchase Price

With few exceptions, the majority of personal possessions depreciate in value over time. However, should a fire, tornado, or flood destroy these possessions, you won’t be able to replace everything for what you paid. It is important to keep your policy up-to-date so that everything from the electronics to the furniture is covered at the current replacement value. The same is true for the home itself. Your home should always be “insured to value.” Doing so can help you rebuild faster and can also help you avoid penalties from the insurance company for underinsuring your home.


Mistake #2: Not Itemizing and Recording Valuables on the Policy

Many homeowners forget to list valuables such as collectible sports cards, jewelry, artwork, etc. on their homeowners insurance policy. Should a disaster knock on the door or a thief make off with these valuables, items that aren’t listed on the policy won’t be covered. Providing records including receipts, photographs, appraisals, and the item’s condition to your insurance agent is a good habit to get into.


Mistake #3: Assuming You Have Coverage For Any Disaster

Many policyholders assume that their policy protects them against everything from floods and fires to tornadoes and termites. The reality is that there can be many exclusions within the fine print of a policy. Some types of coverage including flood and earthquake coverage often need to be purchased as a separate policy. The bottom line is that you should never assume coverage.


Mistake #4: Purchasing a Homeowners Insurance Policy Based on Price

Everyone likes to save money. When it comes to shopping for homeowners insurance, this is a money mindset that is penny wise and pound foolish. While this strategy can help you save on monthly premiums, it can backfire when it comes time to file a claim. For starters, when you file a claim, you may pay a higher deductible. In a worst case scenario, you may discover that your discount carrier doesn’t provide the coverage they promised, or they sit on a claim until long after you need the money. A better strategy is to shop based on reputation. Carefully review the insurance company’s reputation for service and reliability, and balance this with the coverage they offer alongside the cost of the premiums and deductibles.


Mistake #4: Not Optimizing Your Policy

While shopping for a homeowners insurance policy based on price is a no-go, that doesn’t mean you can’t save a buck or two. Bundling automobile, life insurance, and other insurance policies can save you a bundle. Moreover, reinforcing your home with security systems, storm windows/doors, stronger roofs, and updating HVAC systems, septic systems, etc. can reduce your monthly premiums and lower your deductibles. These changes make the home less susceptible to fire, theft, storm, and flood damage. This means less risk for the insurance company which translates into lower costs for the homeowner.


Mistake #5: Remodeling Without a Permit

The internet and television programs have made it easier than ever to get “Do It Yourself” (DIY) ideas for everything from a new bathroom to a fantastic fireplace. The fact is that many of these DIY projects require permits and specialized skills to complete. Failing to secure the proper permits and doing a slipshod job of everything from wiring to plumbing can negate coverage under a homeowner’s insurance policy.

Do you have additional questions about homeowners insurance?
Contact a homeowner insurance specialist at Grindell & Romero Insurance to answer any of your homeowner insurance questions. Providing homeowner insurance to Las Cruces, NM and surrounding areas since 1888. Call today for a free home insurance consultation and quote.

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