Common mistakes when taking out home insurance

Know the common mistakes people make when taking out home insurance and learn from them.

13:48 25 March 2013

A lot of people who take out home insurance policies learn the hard way; they only realize that they do not have adequate or right coverage when emergency strikes.

For example, most homeowners do not know that flood isn’t something that is commonly included in a comprehensive home insurance policy. Thus, when they are affected with flood, they find themselves paying for the damage.

Scenarios like this can be avoided by simply doing the following:

1.    Never assume that “comprehensive insurance” automatically means coverage for every single bad thing that can happen to your home. Before you sign anything, carefully read the policy first.

Take time to understand what it covers. Also, don’t be shy to ask questions. A good broker or insurance company should welcome any question that you might have.

2.    Do not pay without understanding what exactly you’re paying for. Review the bill before you hand over your credit card or your hard-earned money. Determine if the coverage suits your specific needs.

Remember, you don’t need to pay for something that you don’t really need. 

3.    Keep all the documents needed in case you need to make a claim. Make it easier for insurance company to process your claim by presenting them with complete information and paper works.