6 Homeowner’s Insurance Myths About Insurance Premiums

homeowner's insurance myths about insurance premiums Homebuyers discussing home insurance policy with agent

(2) Best Way To Reduce Premiums Is To Minimize Your Coverage

It is one of the most common homeowner’s insurance myths about insurance premiums. People often think that premiums can be reduced quickly by minimizing the coverage.

But, actually it is the worst idea to save money on premiums just by compromising coverage for cost.

You should always make sure that you have adequate amount of coverage for your home. If you don’t have adequate coverage then you may have to regret for it during untoward situation while making claim.

Some of the best ways to reduce premiums include installation of security systems, smoke alarms, bundling your insurance packages, raising deductibles, and many more.

Thus, you should always have adequate coverage to avoid financial set backs.

[Read Also: 11 Biggest Surprises Covered By Homeowner’s Insurance Policy]

(3) Dwelling Coverage Should Be Determined Using Purchase Price Of House

It is one of the most ridiculous home insurance myths or misconceptions in the minds of people looking to buy a policy. Generally, the purchase price of your home includes the cost of land under your home.

Your land doesn’t needs to be replaced in the event of destruction to your home. Your dwelling cost should always reflect the cost of replacement or rebuilding your home in the event of a total loss.

You can determine the cost of rebuilding your home just by multiplying the square footage of your home by local construction costs prevalent in your area. You can also do it by using a home replacement cost calculator from reputed sites.

However, you should not forget to review the cost of construction on annual basis as it has the possibility to change over time.

[Read Also: 15 Common Home Insurance Myths About Policy Coverage]

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