Insurance companies always have a tendency of charging a higher premium from the customers. As an insurance buyer, you must see that you remain covered on all aspects and at the same time, you can save some money on your premium. This is true for home, auto, renters and flood insurance.
Below is mentioned the list of most common mistakes which the insurers make at the time of buying the insurance –
1. Insuring your home based on real estate value rather than the cost of rebuilding
Most people have a tendency of calculating the home insurance premium based on the market value of the property going on at that time in the market. But you must calculate the rate based on rebuilding your home if any disaster happens. The said insurance is meant for rebuilding the home once it is destroyed, but not on the sales price of it.
2. Choosing an insurance company based on the price of insurance only
Do not always run after the company which is offering the cheapest rate. See the customer service of the company in this regard. Some less known companies offer cheap insurance rate but do not get you covered on all aspects. You may ask some reference from your friends whether the company is good or bad and then go for it.
3. Being unaware of flood insurance
Most homeowners do not know that they are not covered under flood insurance. Most home insurance and renters’ insurance policies are not covered for flood. Some private insurance companies have flood coverage policies and also from National Flood Insurance Program (NIFP). If your property is located in the high land areas, then chances of occurrence of a flood are less. But if your property is a low land area, then chances of flood will be very high.
The best way is before buying a property, have a check with NFIP whether it is located in the flood-affected areas.
4. Neglect to buy renters insurance
This policy covers all the possessions and also living expenses if you are forced to move out in case of an insured disaster. Many people forget to do this policy and it is very much required especially when you are staying in a disaster prone area. Buy it along with your home insurance and opt for multi-policy discounts.
5. Purchase the minimum legal amount for your car Do not make this mistake as you may have to pay more from your pocket in case of an accident.