Confused by the high price you’re paying for your home insurance? Many homeowners are paying more than they have to because they don’t have coverage that works for them, or they rely too heavily on their policy. Make sure to avoid these five mistakes in order to keep your home insurance premium healthy.
Mistake #1: Not Understand Your Coverage for Water Damage
Water damage accounts for the “highest value of claims dollars paid by insurance companies,” according to M&W Insurance. On top of that, pricing has significantly changed over the past few years. When you’re looking for home insurance, go over what types of water damage coverage you need (many insurance companies list everything from flooding to groundwater to sewer backups). Ask your home insurance broker to explain the coverage that you are getting in detail. When it comes to water damage, over-coverage may be the best policy, especially if you live in Canada, where unpredictable weather conditions are the norm.
Mistake #2: Not Updating Your Home’s Value
Many homeowners know that they have to update their values and purchasing policies when doing a major renovation, but what about all of the small improvements you’ve added to your home over the years? The replacement cost for your home in the event of major damage is not the same as its market value. If you haven’t had a cost calculation on your home in awhile, it’s possible that you’re home is underinsured, and you may want to explore more full coverage.
Mistake #3: Forgetting to Include Tenants
If you rent out a space in your home to tenants, you are legally obligated to inform your insurance provider. If a tenant in your home significantly damages your property, or injures themselves in your property, you are liable.
Mistake #4: Taking Your Initial Quote at Face Value
Every insurance company in the market has discounts for your home insurance, but it’s likely that you’ll need to find these yourself. The easiest way to find the best price for your home is to compare home insurance quotes online. Websites like ComparaSave allow you to compare policies catered to you from Canada’s top providers all in one place. If you already have a policy, you can leverage the rates that you find with your broker to see if you can bring down your insurance costs.
Mistake #5: Making Unnecessary Claims
If your home has sustained damage that isn’t significant (damage to your driveway in comparison to a home fire), it may be more cost effective to pay for the repair out of pocket. Every claim that you file with your insurance company affects your premium, so you’ll want to weight the costs with the benefits of involving your insurance company. If you do make a habit of filing claims, you may have a surcharge added to your premium, which will cost you more long-term.
No matter what your policy is, the most important thing is to do your research and compare insurance quotes to make sure that your policy covers you adequately, and you’re paying the best price possible. Your home is your most valuable asset, so it’s important to protect it with the proper home insurance coverage.