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Common home insurance mistakes

December 1, 2014

When it comes to insuring your home, there are many common mistakes that homeowners make. Most people sign up for an insurance policy and assume they are covered for everything. However, this is not the case. It is important to always know exactly what types of insurance are out there and what type of coverage you are putting your signature on.

Make sure you understand your home insurance policy.

Take a look at some of the common mistakes to avoid:

  • Not knowing what is included:  It is surprising how many people have a policy they believe covers everything that could potentially go wrong. However, most policies do not cover as much as you think. For instance, flooding is not included on most home insurance policies. This is true even if you live in an area that typically floods. Usually, flood insurance is purchased as a separate policy from the U.S. National Flood Insurance Program. If you live in a high-risk flood area, this is something you should look into.
  • Underestimating the value of your goods: When a disaster strikes, you want your insurance to not only cover your home, but also your personal possessions, according to EnlightenMe. However, you can easily underestimate how much your items are worth. Make sure you know the value of all of your goods, including furniture, electronics, clothes, appliances and all the other objects in your home. This also goes for specialty items, such as antique collections or jewelry wardrobes. These items might require an additional policy to be covered.
  • Not keeping your policy up to date: It is common for homeowners to purchase an insurance policy and then not worry about it again until something goes wrong. Just think about how often your home changes. Whether you are adding to your collections or putting on an addition, it is worth updating your policy. Don't leave anything out.

Mistakes after a disaster

There are other times when you might have the proper coverage but make a mistake that prevents your policy from helping you. For instance, when your home is damaged by a storm, there are many steps you should take, but many you should not. Consider the list below:

  • Cleaning what you shouldn't: After filing a claim when a storm has destroyed part of your living space, it is understandable that you'd want to pick up around your home and get it back to living order. This can be problematic though. Sure, you want to get any items out of the way that could cause injury, but you also want to show that damage occurred, according to Fox Business. If you clean it all up and begin putting things back together, your insurance company might not find all the evidence of a disaster. A good idea, in addition to leaving items to be seen, is to take photos of your entire home after the storm. Capture everything that broke.
  • Allowing the situation to worsen: Don't waste time after a storm. File your claim right away. If you wait too long then the damage could get worse. While it is true you don't want to clean up too much, you also don't want your home left in a state which allows the damage to get worse. Again, make use of photos before any repairs, but fix parts of your home that could continue to get worse without the help.

There are many mistakes to avoid, and they are ones that can be easily made. When searching for a new insurance policy, make sure you read it through and understand exactly what's covered. Additionally, when you need to rely on your insurance after a storm or disaster, make sure you take the right steps to file a claim and communicate with your insurance company.