Comprehending your property insurance coverage is an essential aspect of responsible property ownership. Knowing which mistakes to avoid when it comes to property insurance will both save you money and properly protect your home.
In this post, we’ll go over four property insurance mistakes to avoid so you can get the most out of your policy.
Not understanding your deductible
The deductible is a key component of your insurance policy, and it'll be necessary to understand should you ever need to file a property claim.
Common property insurance deductibles can range anywhere between $1,000 and $10,000 – the higher your deductible, the less you’ll pay on your premium.
But don’t just go putting that deductible to the highest degree possible, know what you’re risking first. If your deductible is $10,000 for example, and some property damage occurs at a cost of $8,000, could you cover it?
Know how much you’re willing to spend out of your emergency fund and compare that to the deductible you’re considering. Would a $5,000 deductible make more sense?
Not getting enough coverage
Look over the amount of property damage coverage on your policy. Is a $10,000 cap enough to cover extensive roof or water damage? Is your home even at risk for these perils?
Next, understand that the dwelling coverage you’ve got will pay for the total cost to replace your property’s structure and the contents or furnishings within it. Therefore, the replacement value of your home is very different than the market value of your home.
If you’ve made any nice renovations, make sure to inform your provider, as your replacement value will increase based on the new digs.
Not calculating your contents coverage
Another section of your property insurance will cover your personal property; this is known as contents coverage.
To ensure all of your expensive personal property is safe from the throws of fire and theft, you must keep a property inventory of your possessions as they come and go from your home.
This means recording each time you buy a new appliance, piece of electronic equipment, furniture set and capturing them by either photo or video. Show how much each item costs on the same ledger, and keep in mind the deductible here too – it may be different from your property damage deductible.
Assuming your landlord’s coverage protects your valuables
For all the renters out there thinking they can forgo property insurance, understand that your landlord only has insurance for the structure of their property, plus liability insurance should they get sued by a tenant.
Your own personal belongings are not covered by your landlord’s policy, nor are they responsible for them should something go wrong.
Tenants insurance is one of the most affordable ways to protect your expensive personal possessions in the event of fire, theft, smoke or any other hazard as a renter. It usually comes coupled with your own liability coverage should any claims be brought against you.