Want to be Smarter With Your Money?

Join our mailing list and get news and info to support your financial goals.



Thank you! Oops!

6 Mistakes Homeowners Make When Buying Insurance

March 06, 2018
Share |

Buying property insurance is not easy as it seems. Finding a good Iowa insurance company is just the first step. There are many other things you need to consider such as understanding the policy types, choosing the right plan, and knowing the coverage you're applying for.

Whether you are a first-time home insurance buyer or not, you need to broaden your knowledge to avoid costly mistakes—and even today, those who have certain experiences buying insurance still fall victim to inflated premiums or a plan that doesn't cover as much as they expect.

In this post, we can help you make the best decisions.

Our experts have covered some common problems consumers usually encounter when purchasing home insurance.

We will also provide some helpful tips to find a policy that protects your property and fits your budget—whether you're buying your first insurance or reviewing the current plan you have in place.

1. Failing to search for more options

First thing you need to know is that insurance companies vary widely in how they assess risks. This is how they determine or set a benchmark regarding the rates you need to pay for home coverage.

That being said, your premiums with one insurance provider could be significantly higher than the other.

This is why our experts strongly recommend an objective insurance review to find the plan that fits your need and budget. However, price should not only be the only factor. You should dig deeper to the coverage of the insurance plan.

2. Selecting the wrong amount of coverage

This is one of the most challenging tasks when buying insurance. The key here is to work with a local insurance agent to determine the market value of your property and estimate the amount of coverage you need. You want to be sure your home and possessions will be covered if anything ever happens while also not overpaying for unnecessary coverage.

3. Neglecting to update your plan

Many things can change over time. Marriage, divorce, kids being born and moving out, and many other life changes can require updates to your insurance policies.

You might have installed a pool or made certain renovations in different areas of your home. No matter what changes occur, it is always better to inform your home insurance provider to ensure everything is covered.

4. Failing to understand your plan's exclusions

Knowing the coverage of your insurance plan is important. Find out the limitations of your policy. For example, flood damage may not be included in your plan. Keep in mind that every home insurance policy comes with exclusions and it is vital that you understand them.

5. Setting the wrong deductible

The deductible is the amount you agree to pay toward a claim before your insurance takes over. Make sure your insurance provider explained everything you need to pay beforehand. You want to be confident you can manage your deductible if anything were to occur.

Oftentimes, the higher the deductible, the lower the premium.

6. Focusing too much on price

The problem with most homeowners is they always go for the cheapest insurance provider or plan they can find. Well, there's nothing really wrong about it as long as your "cheap" policy is not less expensive because important coverage has been removed or the company has inadequate system.

In the end, you get what you pay for.

These are just some of the things to avoid when purchasing home insurance.

Again, always do your homework. Impulsive buying is the last thing you want to happen when it comes to these matters.

We recommend a complimentary insurance review for homeowners and residents in Iowa.

This is a free consumer service provided by local insurance experts.

Start your free review here.