Your Guide to Property Insurance: 8 Mistakes to Avoid
Your Guide to Property Insurance: 8 Mistakes to Avoid

Your Guide to Property Insurance: 8 Mistakes to Avoid

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We all know that home ownership comes with some major responsibilities, such as property taxes, keeping the lawn cut, and spring cleaning. But did you know that homeowners also need to have insurance? 

In order to keep your home protected, it’s important to understand what insurance you need and what insurance you don’t. Here are eight common mistakes to avoid when looking for your property insurance.

1. Not having enough coverage

You should never buy less than what you need to protect your property. A few years ago, I was sleeping soundly when I was startled awake by the sound of what sounded like an explosion in my living room. Although I saw no sign of flames, the house was filled with smoke. 

I quickly evacuated the house, and fortunately there were no serious injuries to myself or my dog. I’m still dealing with the medical bills and my insurance company’s “exclusions.” 

They’re part of the process, and in fact, in all fairness, I realize that the previous owners and myself were not exactly careful when painting the house before I bought the place. 

Many people don’t realize that the most common cause of residential fires is careless cooking, oven and range fires. Make sure that you have adequate coverage.

2. Buying only the bare minimum

You need to read up on your policy and the coverage that’s available to you. Know what will and will not be covered by the insurance you decide to buy. Don’t go through a broker who only tells you what you want to hear. Research, read, and shop around. 

Find out what things will cost you when a claim arises and what the costs might be in the event of a large payout. Putting your house at risk Whether you’re talking about putting your belongings inside a garage and leaving it open. 

Getting rid of your garden and pool, or letting the backyard sit unused for long periods of time, you’re making a serious mistake if you’re doing things that could put your house at risk.

3. Not understanding your policy

If you don’t understand your insurance coverage, you could be putting yourself in a dangerous situation. Your insurance policy should explain everything you could possibly need to know. 

The policy should also explain the difference between “insured” and “fully insured” vehicles. What’s the difference between coverage limits, comprehensive and collision? 

Not having a sufficient amount of uninsured and underinsured vehicles I’ve talked to many insurance agents who think that if you’ve only insured one or two vehicles, you don’t need to insure any others. 

Yes, this might be true, but there’s nothing wrong with being extra cautious with your vehicles and making sure you have the coverage required.

4. Not considering coverage for your belongings

Did you know that you can get money from your home’s contents insurance if you have problems with theft? It’s a little-known benefit of this type of insurance, and you can get the money back sooner. Maybe that has happened to you. 

Perhaps you have some property damage or a theft and want the money back to cover the repair cost. Not reviewing your policy Most homeowners know that they have a standard home insurance policy, but that does not include much in the way of insurance for items in the home such as jewelry or collectibles. 

Do you have to own a large quantity of them to qualify for an item-specific policy? Is it worth the expense to have it on your policy?

5. Not understanding the deductible

Being clear on how much you can spend on homeowner’s insurance and the deductible is important for many reasons. The first reason is that having the correct amount in your budget for insurance can have a big impact on how much you spend. 

That’s why many homeowners take on higher premiums than necessary. Or they don’t buy enough. That’s especially true if you don’t understand what your deductible is for your homeowner’s insurance. 

And it’s especially important to understand that amount before you make any major repairs. Otherwise, you could be out hundreds, if not thousands, of dollars if the repairs go wrong and it turns out you did not have the correct amount of insurance in place.

6. Not considering renters insurance

If you are going to live in your home with your renters, make sure they are covered as well. Some renters insurance only covers them, and if you have to make a claim, the insurance company may not pay for it. 

If you don’t have renter’s insurance, you could be sued for all your renters’ damage. Furthermore, your insurance company can’t have a claim if a renter is already paying your premium. 

Renter’s insurance doesn’t cover damage to the inside of your home, but it will cover you if your renter loses something in your home like jewelry, or if your renter’s tire gets slashed while your home is being repaired. Not understanding the costs involved in making a claim Even if you made a claim before, don’t give up.

7. Not understanding what’s covered

Learn what each insurance company covers. Review your policy annually to make sure you’re adequately covered and that you’re not having unnecessary exclusions removed. If a repair isn’t an emergency, chances are it’s not covered. 

If you don’t make repairs in a timely manner, you could be getting your repairs covered, but it will cost you in damages and premiums. Make repairs on your own or get an attorney to help you. 

Leaving out any of the above issues and walking away If you have insurance, you should read the fine print. Get a second opinion. 

Ask for clarification. Don’t be afraid to ask questions. Don’t be cheap. Not paying any claims It’s pretty common to let insurance claims slide because you don’t want to pay.

8. Not understanding what’s not covered

This sounds strange, but the most common error property owners make is getting insurance that doesn’t cover a property. This would mean you can’t insure any water damage if the home is located in floodplains or on an ocean. 

Be sure to make sure that any water damage insurance you buy will cover you for water damage of any type. You wouldn’t want to have to pay for something that isn’t covered. Insurance can get pricey. There are a lot of insurance companies out there vying for your business. 

Some of them are just looking to scam you out of some money. There are some scams out there where they will sell you a cheap policy that doesn’t even cover you for one thing. To avoid this, be careful with who you are buying from.


My hope is that the short quiz above helps you put into perspective the risks you face, and that you don’t waste too much time and money being involved in unnecessary disputes. What do you think? Do you have any good tips or insights? Please share them in the comments.

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