Tips to Avoid Costly Home Insurance Mistakes

February 13, 2013

Home Insurance MistakesMany Canadians worry more about overpaying on car insurance; it’s easy to overlook overspending on home insurance. reveals the top mistakes that homeowners should avoid to not overspend on their policies.

With the variety of home insurance options it’s easy to overlook some details or ensure the best coverage for a homeowner’s needs. Home insurance protects one of the largest financial investments that Canadians make in their lifetime; and just like any other insurance policy; there are ways to save some money. The following are the top mistakes and reasons why people overpay on their home insurance policy.

Not Comparing Rates

Just like automobile insurance, taking the time to shop around can save money immediately and in the long run. Failing to compare home insurance quotes is a very common mistake, especially for new home buyers who are eager to complete the transaction quickly.

Using Different Insurance Companies

By separating home insurance policies from auto insurance, or other insurance coverage, homeowners could be missing out on multi-policy discounts. By combining various policies within the same insurance company, you will be offered bundled savings.

Failing to Review the Home Description

Home insurance policies cover the specific details of a property. If the information provided to the insurance company is inaccurate, the rate can be incorrect. Take the time to review the property specifics to be certain the right information is providing about the home. This also ensures proper coverage.

Selecting a Low Deductible

Choosing a lower deductible is personal choice, based on the homeowner’s comfort level; but it can increase the premium. Keep in mind that the higher the deductible, the lower the premium. Over the long term, higher deductibles save more money in cases where there are no claims filed.

Paying Fees

It’s common for insurance companies to charge a fee for monthly billing, but no fee when the annual premium is paid in full upfront; and some insurance companies even offer a discount for full payments. There may also be fees added if invoices are mailed out, instead of setting up pre-authorized payments.

Lack of Discounts

Some home insurance companies will offer discounts for security additions to your home. Speak with the insurance company and ask for all available discounts.

Not Researching Insurance Before Buying a Home

In some cases, it’s best to obtain insurance quotes before buying; especially with homes using different construction materials or homes that use an older method of wiring. These types of homes can have a bigger impact on your home insurance rates. Obtaining a quote prior to purchasing will allow for budgeting.

Insuring Unnecessary Items

People often obtain policies and include coverage for items such as jewellery or electronics; however, they forget to remove these items once they no longer own them. Check the list of covered items periodically and remove items from the policy that are no longer required.