Looking for Home Insurance in Michigan? Avoid These Rookie Mistakes
Since you’ve spent a sizeable sum on your house, you’ll want to protect it against fire, theft, hurricanes, and other disasters via home insurance. Unfortunately, many first-time homebuyers are clueless when it comes to adequate home coverage.
In her Forbes.com article, consumer reporter Caroline Meyer talks about four common homeowner’s insurance mistakes, the foremost of which is underinsuring your home:
“Insurance experts say failing to have enough insurance to cover the cost of rebuilding your house if it’s destroyed is the biggest mistake homeowners make. Amy Bach, executive director of the consumer advocacy group United Policyholders, says one 2009 study found that two-thirds of U.S. homes are underinsured.
Why? For one thing, many homeowners buy only enough insurance to cover the amount of their mortgage. But the mortgage may be, at most, 80 or 90 percent of the value of the house, depending on the original down payment (less, if the home has appreciated in value).
For another, some policyholders insure an amount equal to the current value of their homes. But this figure may be far less than the actual cost of rebuilding your house, including labor and supplies (and both of those may rise sharply after a storm when there’s big demand and short supply).”
Meyer also points out that many homeowners assume flood insurance is already included in their policies. After all, insurers often reimburse damage arising from other natural disasters. In reality, though, flood insurance is a separate coverage that you have to pay extra for. You can ask your broker or agent to arrange your policy to include flood coverage.
In addition, it would not be wise to discount, as many others do, the possibility of unforeseen and potentially crippling expenses like storm damage as well as mold or sewage backup removal. As many homeowners also fail to consider deductibles when they sign up for a policy, the writer also advises going for a plan that has one flat-rate deductible.
Meanwhile, a leading Michigan home insurance broker like Allied Insurance Managers, Inc. would also agree that one should never miss out on savings opportunities when it comes to home insurance. Industry studies show that the higher your home’s risk factor, the greater your insurance premium will be. However, things like fire alarms, home security systems, and fire-proof building materials can all lower risk. As such, consider adding these to your home before getting a policy.
A home is a long-term investment, so be prepared for any unwelcome eventuality that might befall it. You can talk to a trusted broker who will help you find the kind of homeowners insurance in Michigan that perfectly suits your needs.
(Source: 4 Costly Homeowner’s Insurance Mistakes to Avoid, Forbes.com, February 15, 2013)