Home insurance mistakes you don’t know you are making
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When it comes to our home insurance, it is important to cover all bases. We rank some of the most common missteps to avoid when purchasing home insurance.
1. Underestimating the impact of floods.
Not all home insurance policies provide coverage for flood damage, but it is fast becoming essential to homeowners. Rising global temperatures have led to extreme weather changes and rising sea levels, which in turn has led to more floods around the world. Some areas that have been recently affected include
Vietnam and Thailand, where countless homes were submerged or damaged as a result of torrential rain in 2017*. As such, it is wise to consider insurance plans that include flood coverage, such as MSIG’s Houseowner Insurance.
2. Adjusting home insurance according to real estate value.
Real estate prices fluctuate in the market all the time. Some people reduce insurance on their home to get more savings when the value of their homes drop—but you should refrain from doing so. That is because the price of rebuilding your home remains the same, no matter your real estate value. In the case of an
unfortunate disaster, you will likely have to fork out a fortune.
3. Undervaluing your home contents.
Most home insurance plans have limitations for claims regarding your personal possessions found in your home. For example, you may have expensive furniture and home appliances that total up to a large sum—but the coverage you have is limited to much less than that. Before purchasing any home insurance, always make a list of all your important home contents, especially those that cost above $1,000. That way, you can check whether your chosen home insurance plan contains or matches the value of both your home and the contents inside it.
4. Purchasing home insurance based on lower premiums.
While lower premiums can represent savings in the long term, they may not necessarily be the best option. Some insurance policies may have removed certain important aspects such as flood coverage so as to bring down the price of a policy and entice more buyers. Tip: Identify your insurance needs and priorities before
going to any insurer, such as whether you live in an area that is prone to floods. Doing so will help to keep your needs top-of-mind before the price.
The key to avoiding costly mistakes lies in understanding home insurance. Find out more about the different home insurance plans we have available here.
