Check Your Home Insurance for These 5 Common Mistakes

Credit: cookie_studio via Freepik

Do you worry about the safety of your home in the winter? The risk of a fire is much higher in the colder months, even after the holidays, especially if your home has older wiring or a fireplace. If you like to light candles or use a space heater to supplement the heating, you’re at an even higher risk.

Even beyond fire risks, winter weather can do a number on your roof or lead to frozen and burst pipes. Water and wind damage are also constant concerns.

You can’t protect your home from everything, but you can make sure that your insurance will take care of any issues that come up.

If there is a fire in your home or another major loss, you can get help from home insurance lawyers to deal with the insurance company. They can make sure you get a fair settlement from the insurer, but what they can’t do is change the terms of your policy.

Before anything happens, review your policy for these common insurance mistakes.

#1 Your Deductibles Are Too High

Your deductible is the amount of money that you have to pay out of pocket to repair damage before the insurance starts to cover it.

If you try to claim an expense that’s lower than your deductible, you won’t receive any compensation for it, but the claim will still be recorded. Instead, you may want to inform the insurance company of the damage (to prevent future claims of negligence) and pay for it yourself.

Unless you have emergency savings at least as high as your deductibles, they may be too high.

#2 Your Coverage Limits Are Too Low

The same issue applies to coverage limits. For example, if your coverage for jewellery is only $5,000, and you lose $10,000 worth of jewellery in a fire or theft, there’s very little you can do to recoup more of that loss.

In addition to your total coverage limits, you should also take a look at what type of coverage you have. Replacement Cost coverage tends to make your insurance claim easier, as the insurer should provide the funds to replace lost property, including structural repairs and lost belongings.

Actual Cash Value coverage may leave homeowners paying more out of pocket because they only receive the depreciated value of lost belongings and structural elements. For example, if you have an older roof, the insurer likely won’t provide you with all of the funds you need to build a new one.

#3 You Don’t Have a Home Inventory

Should you ever have to go through a total loss, it can be very hard to remember all of your lost belongings. Personal contents accumulate in our homes over the years. Even given all the time in the world, it would still be a struggle to remember it all.

A home inventory is a running list of all the personal contents in your home, including details such as how much they cost and where you purchased them. Should you have to make an insurance claim, a home inventory can make the situation much easier.

#4 You Haven’t Reported Renovations to the Insurer

When you renovate your home, you change its value. Your insurer needs to know when you renovate, whether you’ve built an extension, remodeled your kitchen, or renovated your roof.

Homeowners may be reluctant to do this because it could mean higher premiums, but unless the insurer is aware of a change in the value of your home, they will not provide the funds to replace it in the event of a loss.

#5 You Haven’t Kept Your Home in a State of Good Repair

Good home maintenance isn’t just about your own comfort and safety or protecting the significant investment you’ve made in your home. The insurance company also expects you to keep your home in a generally good state of repair.

The insurance company may deny your claim due to negligence or pre-existing damage. There is a reasonable expectation that you will take action to prevent damage or further loss when something happens. For example, if you have to replace your roof after a wind storm and the insurance company finds that pre-existing damage weakened the structure of your home, they could deny the claim outright.

It’s up to the homeowner to make appropriate repairs to prevent further damage. Make sure that trees on your property are well-maintained, your electrical wiring is up-to-date, and be sure to ask a friend to check in or hire a house sitter if you are going to be away from your home for an extended period of time.