When purchasing home insurance, it is important to avoid several common mistakes. One of the most common mistakes is forgetting that most policies require extra flood coverage. For example, after Hurricane Harvey hit southeast Texas in 2017, about 92,000 Texans were able to rebuild their ruined homes because they purchased flood insurance. Another mistake is insuring your home for market value instead of replacement value. The limits on your dwelling coverage should be the amount it would take to rebuild your home, not what someone would pay to buy it.
It is also important to make sure that your policy covers the most common claims, such as property damage, liability protection, personal property, and living expenses if your home is uninhabitable. Additionally, you should consider the deductible when purchasing home insurance. Higher deductibles may result in lower premiums, but may increase the financial burden in the event of a claim. Finally, it is essential to make careful decisions regarding your policy and buy enough coverage or the right insurance coverage for your true needs. Without proper coverage, your mortgage company could obtain forced hazard insurance at your expense.