Choosing the right homeowners insurance is such an important process. If you select the wrong type of insurance or let your coverage lapse, you’re running the risk of catastrophic loss. With 60% of all U.S. homes underinsured by a whopping 20%, making a well-informed decision when shopping around for coverage is pivotal.
Policies For High-Risk Zones
If you’re living in an area that is prone to natural disasters like hurricanes, floods or earthquakes, ensure that your dwelling and items are properly covered. Many homeowners don’t realize that standard policies do not include protection for specific natural occurrences. One study showed that 56% of homeowners incorrectly believe flood insurance is covered by standard policies when in reality it’s an additional type of coverage. To put that into perspective, when the superstorm Sandy hit in 2012, nearly one-third of the victims didn’t have the proper insurance. Know that damages covered in the primary HO-2 coverage are generally the same for all companies:
- Snow and Sleet
- Damage caused by the weight of ice
- Falling objects
- Riot or civil commotion
- Damage caused by vehicles or aircraft
- Damage caused by “accidental” bursting or overflowing from plumbing, heating, or AC systems
Working with your insurance company to buy separate protection if you live in a high-risk zone is a critical component to consider when you compare homeowners insurance policies. Identifying the best homeowners insurance companies in your area is a great place to start.
Not Knowing The Actual Value Of Your Home & Belongings
Not covering the actual amount of your dwelling and belongings can be a detrimental mistake in the long run, and isn’t worth the pennies saved on a cheaper premium. Moreover, if you have expensive items in your home, be sure that your insurance coverage will incur these costs if damage occurs or if you need an additional plan. Meet with your insurance agent or company to ensure that you’re properly covered for any and all expensive items you own. Agencies are equipped with software that can adequately estimate the replacement costs of your home.
Understanding the Difference Between Actual Cash Value and Replacement Cost Coverage
When you’re choosing your homeowners insurance policy, be sure you’re clear about the differences between actual cash value and replacement cost coverage. Replacement cost will pay the full price of replacing your belongings up to a certain amount whereas actual cash value will give you the book value of the item. So, if your couch is five years old and was purchased for $1,000, you’ll get next to nothing with actual cash value coverage. With replacement cost coverage, your item will be swapped for a new one.
Remember To Research Customer Ratings and Reviews
Many shopping around for homeowners insurance do not take the time to sit down and research which company is best for them. Utilizing Clearsurance will not only provide you with the insurance ratings you’re looking for, it’s the only site that also includes real testimonials and reviews by consumers like you. For instance, if you’ve narrowed down your search to two providers like Geico or Amica, you can make the educated decision on which insurer has better consumer ratings and reviews.
Join the Thousandaire newsletter
Subscribe to get our latest content by email.