Six Common Mistakes When Buying Homeowners Insurance

For most people, buying a home is the largest investment of their lives. However, in today’s market conditions—characterized by rising property values and construction material costs—over 50% of homes in the U.S. are underinsured.

The truth is that homeowners insurance contracts are often confusing, filled with terms that aren’t part of everyday language. As a result, mistakes made when selecting a policy often become apparent only when filing a claim.

To help you avoid such pitfalls, here are six common mistakes and how to steer clear of them:

Mistake #1: Not Asking the Right Questions

The purpose of a policy is to protect your property. You might wrongly assume that certain elements are covered when they’re not. Always ask:

• What does this policy cover?
• What’s excluded?
• How do I file a claim?
• What is the deductible?
• Do I need additional coverage?
• Are there discounts available?

Mistake #2: Insuring the Home for Market Value Instead of Replacement Cost

Insuring your home for its replacement cost ensures the insurer will reimburse you for the cost of rebuilding or repairing the property, including materials and labor, at current prices. However, this is subject to the policy’s limits.

Mistake #3: Choosing a Deductible That’s Too High

While opting for a higher deductible can lower your premium, you must pay this amount upfront when filing a claim. Choose a deductible you can comfortably afford.

Mistake #4: Assuming Your Property Is Covered Against Floods

Most homeowners insurance policies exclude flood damage. To protect against floods, you must purchase additional flood insurance.

Mistake #5: Not Reporting Major Changes to the Home or Household

It’s essential to inform your insurer about significant changes, such as:

• Getting married
• Adopting a pet
• Adding a new room to your home

These updates can impact your coverage. For instance, if your pet causes damage and your insurer wasn’t informed of its presence, related claims might be denied.

Mistake #6: Skipping Professional Advice

Avoid buying a policy without consulting a specialized professional. An advisor from Univista Insurance can clarify critical terms like:

• Actual Cash Value (ACV)
• Replacement Cost Value (RCV)
• Exclusions
• Umbrella Policies

These factors define the scope of your coverage and protection limits.

Protect Your Investment

Call Univista Insurance and get the most affordable and comprehensive homeowners insurance on the market.