Home insurance is an expensive but necessary purchase; when you buy your policy, you are paying for the peace of mind of knowing that, should the worst happen, your home and contents are covered and will be replaced. Here are some of the most common mistakes people when insuring their home that could cost dearly.
It is important to protect your home as well as possible. The quote that you are given by an insurance company will depend on the type of security features that you have on your doors and windows and if your property is alarmed. Many providers will give you a lower quote if you have approved locks on windows and doors. However, you must be truthful about how your home is protected otherwise, in the event of a burglary claim, you insurer can legitimately refuse to pay out.
Underestimating how much your possessions are worth
Most insurance companies will ask you to estimate the value of what you own to ensure that you have the right amount of cover. However, research shows time and time again that consumers underestimate what their possessions are worth. If you underestimate the cost of your belongings then your insurer is legally entitled to only pay out 50 percent of any claim.
Another reason why it’s so important to accurately estimate how much your possessions are worth is that, in the event of a fire, you may have to claim for the full amount if you lose everything in the blaze.
When your policy comes up for renewal don’t assume that your incumbent provider will automatically offer you the best deal. It pays to shop around as many companies offer their best deals to new customers and then push the premiums up in subsequent years. So if you’ve received a cracking deal with a new insurer the chances are that your premium will be considerably higher next year!
Forgetting to insure valuable single items
Most insurers automatically cover valuables up to a certain amount however, if you have items that are worth more than the amount specified by your provider then you need to name it separately on your policy. This will more than likely push your premiums up but you must to this, otherwise you won’t be covered in the event of a claim. So don’t forget to check with your provider as to what this single item limit is. And if you buy something new and expensive don’t forget to advise your insurer of this!
Of course, the most fundamental mistake to make is not having any insurance at all! Yes, it’s expensive but most companies offer the option to pay monthly – it may cost a little more but spreading the payments over a year takes the sting out of it. Just think for a moment how much it would cost to replace all your possessions, without insurance it may be nigh on impossible.