Buying homeowners insurance can be a confusing process, and it is all too easy for mistakes to be made. Here is a quick look at 5 of the most common mistakes made when selecting homeowners insurance and what you can do to avoid them, brought to you by the insurance experts at Tri-Star Insurance.
1. Believing the Entire Property Is Insured
Homeowners insurance in San Diego is designed to cover the structure of the home and some of the possessions inside. Many people make the mistake of choosing a policy and not realizing it only covers the home and its contents. The land the home is on, however, is not covered.
2. Failing to Identify the Correct Occupancy
Anyone who is renting out their home, renting another building on their property, or currently not living in that particular home will need much different coverage than a single-family residence would. Homeowners must tell their insurance provider exactly how the property is being used and who will be living there so the appropriate policy can be assigned.
3. Assuming All Natural Disasters Are Covered
Homeowners insurance is your first line of defense against most accidents and injuries, but very few basic policies cover natural disasters such as floods and earthquakes. Homes that could be damaged by natural disasters will require an additional insurance rider.
4. Not Choosing the Replacement Cost Option
Many people opt for actual cash value policies instead of replacement cost policies simply because the premiums are lower. If an accident does occur, those with an actual cash value policy might receive only a fraction of what they need to replace their home or repair any damage, whereas a replacement cost policy can reimburse you for 100 percent of the costs.
5. Purchasing the Cheapest Policy
Just as with any other financial product, purchasing the cheapest policy could be a mistake. Homeowners should consider variables such as deductibles, monthly premiums, and the reputation of the insurance provider before making a decision.
The agents at American Tri-Star Insurance can guide you through the process of purchasing home insurance that best suits your needs to ensure you don’t make any hasty mistakes. We also offer a variety of other insurance services. For free San Diego auto insurance quotes or information on commercial, health, motorcycle, and RV insurance, call one of our representatives at 619-272-2100.