When shopping for homeowners insurance coverage, it is easy to make buying mistakes, especially when one bases their decisions on assumptions rather than on concrete facts. Many consider home insurance an unavoidable necessity imposed by their banks, rendering little or no attention to its adequacy or underlying conditions. Thus, they make ignorant choices and are shocked to find themselves under or even uninsured against certain perils.

To avoid such unpleasant last moment surprises, here are the three most common mistakes you must avoid while buying homeowners insurance.

Mistake #1 – Assuming a Standard Homeowners Policy Also Covers Mold, Flood, and Sewage Backup Damage

Typically, a standard homeowners insurance policy does not cover damage resulting from mold, sewage, and weather-related water damage. For example, suppose your home is located within a designated flood zone. In that case, your mortgage lender will most likely require you to purchase an additional home insurance policy called a flood insurance policy. The same is true if your property is near a large water body such as an ocean, canal, river, or lake.
Take note that even if your mortgage lender does not require you to have flood insurance, you should carry it if your property is located near any of the aforementioned water bodies. Besides flood insurance, you should also purchase mold insurance and sewage backup coverage, which is usually relatively inexpensive, with annual premiums starting from as low as $50.

Mistake # 2 – Assuming Your Deductible is a Fixed Amount

A deductible is one of the main features of a standard homeowners insurance policy. It is a specified amount of money that you will have to pay upfront when you file a homeowners insurance claim. It is worth noting that your deductible determines your annual premiums. More specifically, a higher deductible means lower annual premiums and vice versa. Besides your deductible, your credit score will also determine the cost of your homeowners insurance coverage.

Similar to a deductible, a higher credit rating means lower annual premiums and vice versa. For this reason, you should make it a habit of going through your credit report regularly to ensure it is accurate. If you file a homeowners claim, your insurer could change your deductible from a fixed amount to a percentage of your home insurance policy. This percentage could be as high as 15%, so make sure to go through the fine print carefully to avoid unpleasant surprises.

Mistake # 3 – Not Leveraging Discounts Programs

To entice and retain policyholders, many home insurance companies offer a variety of discount programs. In most cases, such programs apply to a wide range of things including, among others:

• Using safe building materials
• Installing a home security system and features such as deadbolt locks and surveillance system
• Installing home safety system such as fire alarms
• Purchasing different policies from the same carrier

If you have done any of these things, make sure to take advantage of the relevant discount program.
While planning to buy a new home, pay careful attention to all the details mentioned in your homeowners insurance policy. If you have been living in the same house for a while, it is high time to review your current coverage against more feasible options. In either case, knowing your unique needs and evaluating your coverage options will help you avoid these common mistakes while buying homeowners insurance.

If you want to learn more about home insurance policy, contact the experts at First Insurance Solutions. We will assist you with all your coverage needs.

Wildfires are among the leading cause of home destruction in the State of California. To give you an idea, the US Forest Service recorded about 7,860 fires in 2019 alone. Unfortunately, it is common for home insurance companies to cancel home insurance policies for properties located in high-risk areas. For example, between 2015 and 2019, home insurance companies declined to renew or offer new home insurance policies for nearly 9,000 properties located in the wildfire-prone counties, including Orange County to Lake Tahoe, as reported by the New York Times. However, even if your insurer drops you, you should take the necessary measures to protect your property.

Some of the measures you can take to get back your homeowners insurance after being dropped include:

Dispute the Cancellation

Despite the reason behind the cancellation, there’s still a chance for your homeowners insurance cover to be reinstated. This won’t be an easy process, but there is no harm in trying. To be precise, simply file a dispute to the insurance company if you think your insurer has canceled your policy illegally. However, make sure you have strong evidence to defend yourself before the insurer. For example, your Comprehensive Loss Underwriting Exchange (CLUE) report should indicate a good track record of your coverage. In case you’ve filed multiple claims in the past, getting your coverage reinstated may be difficult.

Make the Required Repairs

Data from Statista shows that home remodeling expenses in the U.S. amounted to about $330 billion in 2019 alone. This shows just how seriously insurance companies take repairs. As a result, the only way to get your home insurance renewed is to conduct the necessary maintenance pointed out by the insurance company during the home inspection. In particular, old roofs are a disaster waiting to happen, which may cause the insurance company to cancel your policy. Therefore, make sure you repair the roofs, sinks, fixtures, and tiles to get your coverage back.

Relocate to Safer Zones

In 2019 alone, at least 90 natural disasters happened in the US, with severe thunderstorms occurring about 49 times, as per Statista. In this regard, some states are more prone to natural calamities than others. For instance, the State of Florida has experienced more hurricanes than any other country in the US, as published by the Information Insurance Institute (III). For this reason, relocating to safer cities such as Clermont, Florida, can save you from disasters such as wildfires, earthquakes, hurricanes, and thunderstorms, and help get your homeowner insurance coverage back.

Switch Insurers

Sometimes, the insurer may fail to renew your coverage even after filing a dispute and repairing your house. At this point, opting for another insurer will be appropriate. According to the National Oceanic and Atmospheric Administration (NOAA), there are over 2,500 homeowner’s insurance carriers in the U.S. With this much competition, it is relatively easy to switch insurance companies. However, if you switch insurers due to this, expect a higher cost of homeowners insurance and rates. A government Plan might also be an option to cover your home.

If your home insurance company drops you, take these measures to ensure your property is always insured. Additionally, contact the experts at First Insurance Solutions if you want to learn more about the home insurance policy. We will assist you with all your coverage needs.