The most common mistake a homeowner can make is assuming what is and isn’t covered by their home insurance. Getting to know your home insurance can save you a lot of big expenditures in the future. Make sure to avoid these common mistakes so that you won’t be surprised by a hefty bill!
Many homeowners are surprised when disaster strikes and they don’t have enough home insurance to cover the damage. A common mistake that many homeowners make is that they buy only enough home insurance to cover the mortgage on the house, which is 80-90 percent of the value of the house, or less if the house has appreciated in value over time. The best solution to this is to ask your insurance agent how much to insure your house for. You can also ask your insurer about automatic inflation provision to adjust your insurance if your home appreciates in value over time. You can also consider “extended replacement coverage”, which covers your home for 125% of your policy limit, or “guaranteed replacement cost coverage”, which covers your home completely, no matter what the cost. (more…)