Avoid Mistakes When Insuring Your Home
Some people read inaccurate online articles and are misinformed about home insurance. Some people tend to believe plausible lies, such as how insurance firms will always pay out whatever amount they deem their customers’ home contents to be worth. Here is a little advice to help you avoid making some basic errors when insuring your home.
A Cheap Policy May Leave You Under-Insured
Some people make the mistake of under-insuring their home by default. They may go for the cheapest home insurance option only to find that they suffer financially when they try to make an insurance claim. If you are hunting around for the cheapest possible policy, make sure you are as well covered as you think you are. Ask yourself why the policy is so cheap.
Take Advice From a Broker
An insurance broker should give you a customized and impartial opinion. Some brokers receive a bigger commission if they send your custom to certain insurers. You need to be aware that some brokers do not have your best interests at heart. Ethically and professionally, they are supposed to give you an impartial opinion, but that is not always the case. Most brokers are honest but be aware that there are some bad eggs out there.
Be Very Specific With Your Insurer When Insuring Your Home
If there are things in your home that absolutely must be insured, then you need to be very specific about them when you create your policy. For example, you may have a very expensive piece of jewelry for which you would like to be fully compensated if it is lost. Simply having contents insurance may not offer sufficient coverage unless you are very specific about how it could be lost and how much you expect in compensation from the claim.
Be Honest When Creating Your Policy
You may be advised to overestimate the value of the contents of your home. However, this will simply result in you having to pay a bigger premium. It does not guarantee that you will receive compensation for the amounts you believe your goods are worth. Honesty is more than just a prudent move; it is a legal requirement. The small print on your policy is there for a reason. Your policy is a legal document, which means that, if you bend the truth on it, you are breaking the terms of the contract, and the law.
Take a Realistic Look at What You Are Prepared to Risk
Do not forget that most of the items in your house will decrease in value. This means that you may leave them off your policy without losing too much in the end. For example, if you make a claim for your PC in two years, then the PC you have bought new today is going to be out of date and you will be able to repurchase it for a fraction of the price you paid for it. Your insurance company is only likely to pay you enough to buy a second-hand one anyway, so why bother paying an inflated premium for two years when you could repurchase the PC with the money you saved from not insuring it?