New Home Insurance: 4 Avoidable Mistakes When Buying

New home insurance may be needed for a number of reasons. The policy’s terms may change, the borrower’s financial situation may change, a borrower may move to a house that is ill-suited for the current policy, the policy was bad and the borrower didn’t realize until it was too late, etc. Whatever the reasons, policyholders should avoid several mistakes that are commonly made when buying new home insurance.

Don’t Settle for the First Choice

When it comes to finding new home insurance, it is always prudent to shop around. Even if the policy that the borrower found first looks good, there is always a chance that there are other, better policies out there. Policyholders should consult as many sources as possible and carefully compare all the potentially good policies.

Pay Attention to Details

Many policyholders focus only on certain aspects of the insurance (mostly the rates), at the expense of everything else. However, rates are not the only indication of the policy’s merits. They should check the policy’s deductibles, premiums and any other fees. Policy omissions and hidden classes are sometimes concealed amidst legal jargon most policyholders don’t usually have the patience to read through. This is why they should carefully read the policy paragraph by paragraph. Ideally, they would have a legal professional on hand to clarify any legal terms. Policyholders should also check to see if the company is stringy with its claims or prone to raising rates after a first few months.

Be Discerning About Insurance Agents

The simple fact of the matter is that not all insurance agents are equally qualified. Some may be more experienced, more dedicated and otherwise better than others. If the agent is under-qualified, policyholders may wind up dealing with more insurance-based problems than they otherwise would.  That is why policyholders should research home insurance agents before using their services.

Don’t Buy More Coverage Than Necessary

Insurance providers will try to sell policyholders as much insurance as possible, even if policyholders don’t really need it. Anything beyond the basics should be limited to the dangers the house is likely to face. For example, they may offer flood insurance even if the house is nowhere near any potential flood zone. They may try to persuade the policyholders to ensure land, even though it’s usually unnecessary. Policyholders should also be wary of any coverage that focuses on specific areas of the house – the general dwelling coverage is enough to cover everything just fine.

blog comments powered by Disqus