Top 5 Costliest Homeowners Insurance Mistakes
Home is where you heart is, but as a homeowner you need to make sure that you have the right kind of insurance should something go wrong. In fact, if your home burns down and you don’t have the right type of insurance, then you may only be awarded a partial payment from the insurance company or no payment at all. So with that being said, here are some of the top 5 mistakes insurance experts say will cost homeowners the most.
Accepting the status quo
When you want to buy a new vehicle, a computer or maybe a fridge, you’re always going to do a lot of research before spending your hard earned cash on it, but you don’t do the same when it comes to insurance. In fact, you’re going to stick with the same type year after year. The thing is that if you don’t shop, then you’re actually going to pay more money than you should for it.
Making upgrades and forgetting about it
No one says that you shouldn’t upgrade your home, including changing your sink, your fixtures and everything else, but you should also not forget to upgrade your insurance as well. In general, when you make a major upgrade, not only will you make your home more beautiful and livable, but you’re also going to increase its value. As a result, if something happens to these upgrades, like they get damaged, then the cost of replacing them is also going to be higher. Even more, if you have trampolines, hot tubs and pools, then you could become a lot more vulnerable to lawsuits, so that’s why you need to get the right type of insurance and protect yourself from such risks.
Having a low credit score
Most people think that their credit score is not important when shopping for insurance, but if you live in California, then a bad credit score can actually increase the cost of your homeowners insurance policy. The general consensus is that if you have a credit score of five hundred, then you’re at a very high risk of letting bills slip and not taking good care of your home, therefore leading to claims.
Setting too low of a deductible
When something goes wrong, no one wants to be hit with a high deductible, but if you opt for a lower deducible, then this is going to cost you a lot more in the long term. So basically, by having a low deductible, you’re actually paving the way towards making more claims than if you had to meet a higher deductible. For example, one single claim on your policy will lead to a rate increase of about nine percent. There are even cases when we’ve seen a thirty two percent increase from the same number of claims. To avoid making frivolous claims, you should always consider keeping your deductible as high as you can.
Letting discounts expire
What’s great about homeowners insurance is that you’ll be able to take advantage of a wide range of discounts. For instance, discounts are available to those who buy car insurance from the same insurance company, but also to those who’ve retired or don’t smoke. Living in a gated community is also going to help you get a discount.
Even though the majority of people will ask about potential discounts upfront, once the discount expires they will not follow through and get a new one. Depending on the type of discount you got, some of them may last even 60 months, while others are only going to be valid for 24 months. Therefore, knowing exactly when the discount you got expires and getting a new one as soon as this happens you’re going to save a lot of money in the long run.