BY SOLO INSURANCE®  Updated 2-6-26

Whether you are buying your first home or moving to a new home, make sure that your homeowners insurance needs are met. Learn these four common home insurance mistakes to avoid. Homeowners insurance can be overwhelming at first glance, especially if you’ve never needed it before. Making mistakes when setting up your policy can affect how much money you receive on a settlement. It’s good to know what you’re getting.

Try to avoid making the following mistakes when working with your agent on your homeowners insurance policy.

Overestimating How Much Home Insurance You Have

Homebuyers often purchase a basic homeowners insurance policy and expect it to cover them against any potential property loss. However, this isn’t the case. Often, standard coverage doesn’t cover what you assume it will. Policies rate off actual cash values (ACV, like standard car insurance) or replacement cost value (RCV). In simple terms, the value of the home at the time of the loss or what it costs to rebuild after a fire wipes it out.

In general, your dwelling insurance limits should be worth at least 80% of your home’s replacement cost value. Should your home be destroyed in a catastrophic event, then this coverage can help you rebuild your home similar to how it was before the hazard. KEY POINT: Keep in mind, certain types of damage, such as earthquake and flood damage, are not covered under standard dwelling policies. Learn or ask what your policy will cover.

Waiting Too Long to File a Claim

If you ever have to file a claim on your homeowners insurance, then you need to do so promptly. If you wait months (or even years) then your insurance company has a harder time verifying your claim. As a result, they might decline to cover you. Most filing periods cut off from 30 to 90 days past the loss occurrence. Don’t delay. The earlier you file, the sooner they can address your claim.

Having a Deductible that is Too High or Too Low

Another eye-opening mistake is not knowing your deductibles. Your dwelling and possessions coverage typically contain deductibles (the dollar amounts that you pay for losses before your insurance will pay). For example, if you have a $1000 possessions deductible, then you must pay for $1000 worth of damage to your possessions. Payable up front and out of pocket before insurance covers any damages. A deductible that is too high can make it difficult to pay when you need to. On the other hand, a deductible that is too low can result in high premiums. PRO TIP: Get estimates right away, before calling the insurance provider, to see if making the claim is worth it. If you have $1500 deductible and damage adds up to $1600, it is not worth having a claim on your history. Claims add to your risk evaluation. This applies to all types of claims, including auto insurance.

Not Notifying Your Insurer of Changes

Did you know, when you make changes in your home, you must notify your home insurer? For instance, if you add a new room to the home, then notify your insurance agent. You increased the value and square footage of your home.  You want it to be covered also. Failing to notify the insurer could result in a lack of coverage later on. Communicate. Do an annual review of your policy, or at least every other year.

RECAP

Avoid these common home insurance mistakes. In a nutshell, stay on top of what you’re paying for. Yes, save money on home insurance where you can, but it’s also important to consider all the other aspects of coverage. It’s important to have the right balance of coverage, not just the cheapest policy. It’s important to know your role in the event of a claim. Do you know how much your deductibles are? Work with your trusted agent.

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