When you’re buying your first home, there are many things to think about – and home insurance is one of them. Unfortunately, many first-time buyers make mistakes that can cost them down the road regarding their insurance policy. Here are common mistakes first-time homebuyers make when buying home insurance.
Not Shopping Around for Home Insurance Coverage
Home insurance is a vital part of being a homeowner. It protects your home and your belongings in the event of a disaster. However, many first-time homebuyers don’t shop around for home insurance coverage. By shopping around and educating yourself about home insurance, you can ensure you get the coverage you need.
Not Understanding What Home Insurance Covers
Home insurance covers your home’s physical structure in the case of damage from fire, severe weather, or other disasters. It also covers your belongings if they are stolen or damaged. Home insurance does not cover flood and earthquake damage. You must purchase separate flood or earthquake insurance if you live in an area prone to these events. It is essential to understand what your home insurance policy covers to be prepared for a covered loss.
Setting Your Homeowners Deductible Too Low
Another mistake first-time homebuyers make is setting their deductible too low. A deductible is an amount you must pay before your insurance company kicks in. You are increasing your monthly premium payments by setting a low deductible. In the event of a covered disaster, you may not have enough money to cover the cost of repairs or replacement, and you could end up being stuck with a big bill.