Too many homeowners believe their insurance policy’s coverage limit is linked to the home’s market value, according to an III survey. The value for which a home can be bought or sold has nothing to do with the amount of coverage needed to protect the homeowner from disaster-related losses. While some people decrease coverage to save money, there are other ways to save. In the sections below are some of the most egregious homeowner’s insurance mistakes as well as some tips on avoiding these errors while saving money.
Insuring the Home for its Market Value Rather Than its Replacement Cost
When the housing market declines, some homeowners may believe they can reduce the amount of homeowner’s insurance coverage they hold. However, these policies are designed to cover the replacement cost of the home, not its sale price. Raising the deductible is a better way to save, as a deductible increase of $500 can help an owner save upwards of 25% on insurance premiums.
Choosing a Company Based on Price
While price is an important consideration when choosing homeowner’s Insurance in Hawley PA, it is also important to choose a financially sound company that offers excellent customer service. Buyers should check the insurer’s financial health via independent rating agencies and ask family and friends for recommendations. By doing so, a buyer can find a company that will efficiently and fairly respond to concerns and claims.
Dropping Flood Coverage
Flood damage isn’t covered under standard renters’ and homeowner’s policies. Coverage can be bought through the NFIP (National Flood Insurance Program) along with some private insurers. Many people are unaware of their flood risk, but 25% of all losses occur in low-risk areas. Before buying a home, check with NFIP to determine whether it is in a flood plain. If a person already lives in a high-risk area, they should consider buying flood insurance and looking for ways to mitigate the risk.
While many people look for ways to cut the cost of home Insurance in Hawley PA, sacrificing flood and replacement value coverage is never a good idea. By following the effective savings tips listed here, homeowners can get the coverage they need from website without making cuts in the wrong areas.
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