Your home is likely one of the largest investments you’ve made. So, it’s important to protect this investment with a home insurance policy. If this is the first time you are considering purchasing home insurance, here are some facts that will help you buy the right type of policy.
Not all losses are covered
Most standard homeowners insurance policies don’t cover losses due to earthquakes or floods. If you live in an area that is prone to such natural disasters, you should, ideally, consider purchasing separate insurance for adequate coverage.
The cost to rebuild your home can be more than the market value
Pay attention to the policy’s coverage before you sign up for it. Remember that the cost to rebuild your home can amount to a lot more than your home’s current market value. If your policy covers your home’s market value alone, you could, in fact, be underinsured. So, when you purchase a home insurance policy, ensure that the policy covers your home and possessions.
Your credit score affects the cost of the policy
Did you know that your credit history may have an impact on how much you pay for home insurance? The better your credit score is, the lower your premium is likely to be. So, maintaining a positive credit score can help you save money on insurance premiums for as long as you have a policy.
Update your coverage regularly
Remember to update your policy’s coverage from time-to-time to ensure you are still adequately covered. For instance, if you’ve recently renovated your home or added a pool in the backyard, the value of your home may have increased and you’ll need to inform your insurance company about this.
Avoid raising small claims
Raising a claim with your insurance company may cause your premium to go up. To keep this from happening, use your judgment when raising claims. It’s best if you avoid making small claims that you could have easily paid off.
Keep in mind that home insurance policy rates differ from company to company. So, to get a good deal on your policy, make sure to do some research and shop around for a competitive premium, without settling for lower coverage.