Top 5 Mistakes to Avoid When Purchasing Homeowners’ Insurance
Imagine buying a homeowners’ insurance policy thinking you’re fully covered—only to discover, after filing a claim, that you’re missing something crucial. Unfortunately, two out of three homes in the U.S. are underinsured, putting homeowners at serious financial risk.
But don’t worry—by understanding the top five mistakes people make when purchasing homeowners’ insurance, you can protect yourself and your home. Let’s dive in.
Mistake #1: Not Buying Enough (or the Right) Coverage
One of the biggest mistakes homeowners make is not having enough coverage. Many people assume that their policy automatically covers the full cost of rebuilding their home, but that’s not always the case.
Common misconceptions:
- Insuring your home for the amount you paid for it, rather than its full replacement cost.
- Forgetting to factor in inflation and rising construction costs.
- Choosing the cheapest policy without understanding what’s actually covered.
How to Avoid This Mistake:
- Make sure your policy covers replacement cost, not just market value.
- Review your coverage annually to account for rising home values and renovations.
- Work with an independent insurance agent who can tailor a policy to your specific needs.
- If you rent out your home or use it for a business, make sure you have the right type of policy.
Mistake #2: Not Understanding What’s Covered (and What’s Not)
Many homeowners assume their policy covers everything, but standard homeowners’ insurance has exclusions that could leave you vulnerable.
Common Surprising Exclusions:
- Floods and earthquakes require separate policies.
- Mold, foundation issues, and sewer backups are often not covered.
- High-value items like jewelry, art, or collectibles may require additional riders.
- Poor maintenance issues (such as a long-ignored roof leak) won’t be covered.
How to Avoid This Mistake:
- Read the fine print of your policy.
- If you live in a high-risk area, consider flood or earthquake insurance.
- Ask about additional coverage options for valuables and unexpected exclusions.
- Understand that home insurance is not a maintenance plan—it won’t cover neglect or wear and tear.
The worst time to find out what’s not covered is when you need to file a claim. Be proactive and review your policy before disaster strikes.
Mistake #3: Not Shopping Around for the Best Policy and Company
Not all insurance policies are the same, and neither are insurance companies. If you just take the first quote you get, you could be:
- Overpaying for inadequate coverage.
- Stuck with an insurer that has a poor claims process.
- Missing out on discounts and better deals.
How to Avoid This Mistake:
- Get quotes from at least five companies or let Trailstone Insurance Group shop 40+ companies for you.
- Compare coverage details, exclusions, and customer service ratings—not just price.
- Check the insurer’s financial strength and reputation to ensure they can pay claims.
A cheap policy might seem like a good deal—until you need to file a claim. Choose wisely.
Mistake #4: Not Reviewing and Updating Your Policy
Your life changes, and so should your homeowners’ insurance policy. What worked five years ago might leave you underinsured today.
When Should You Update Your Policy?
- After home renovations or upgrades (like adding a new room or remodeling the kitchen).
- If you add a pool or trampoline (liability risks increase with these additions).
- As real estate values rise, to ensure your home is not underinsured.
- If you acquire new valuables (jewelry, art, collectibles).
- If local building codes change, affecting rebuilding costs.
- If you start a home-based business, which may require additional coverage.
How to Avoid This Mistake:
- Review your policy at least once a year.
- Notify your insurance company about major changes to your home or lifestyle.
- Work with an independent agent who can help you adjust coverage as needed.
If you haven’t updated your policy in the last two years, now is the time to review it.
Mistake #5: Ignoring Discounts and Bundling Options
Many homeowners overpay for insurance simply because they don’t take advantage of available discounts.
Ways to Save on Homeowners’ Insurance:
- Bundle home and auto insurance with the same provider for a discount.
- Install security systems, smoke detectors, or smart home devices for lower rates.
- Maintain a claims-free record to qualify for loyalty discounts.
- Increase your deductible to lower your monthly premium.
How to Avoid This Mistake:
- Ask your insurance provider about every possible discount.
- Work with an independent insurance agent who can find hidden savings.
- Review your policy regularly to ensure you’re getting the best available rate.
Insurance companies won’t always tell you about discounts unless you ask. Take a few minutes to check—you might be surprised at how much you can save.
Final Thoughts
Avoiding these five mistakes can save you thousands of dollars and ensure you have the right protection for your home.
Recap:
✅ Make sure you have the right coverage—don’t underinsure your home.
✅ Understand what’s included—and what’s not.
✅ Shop around—don’t settle for the first quote.
✅ Review your policy regularly—update it when life changes.
✅ Take advantage of discounts—don’t leave money on the table.
At Trailstone Insurance Group, we make it easy to find the best coverage at the best price.
- We shop 40+ insurance companies to find you the right policy.
- We help you understand your coverage—without confusing legal jargon.
- We have 2,400+ five-star reviews—Google us and see for yourself.
If you want expert guidance and a hassle-free way to get the best homeowners’ insurance, contact us today.
Until next time, stay informed and stay protected.