Home Insurance Policy Document

Bauld Insurance Tips Common mistakes when buying home insurance.

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Buying home insurance can sometimes feel a bit overwhelming, whether it is underinsuring the value of your home and belongings, or expecting coverage for things that simply aren’t included in your policy. To help you avoid common mistakes when buying home insurance, we have some valuable tips to help you feel more confident with your home insurance coverage.

Mistake 1: Choosing a higher deductible to save on the premium.

In a home insurance policy, a deductible is the amount of money you pay in the event of a claim before your insurer pays its portion. While choosing to have a higher deductible can help reduce your monthly premium, what if you have a claim during a period in which you can’t afford to pay the deductible amount?

Even though a lower deductible might mean your insurance premium payments are slightly higher, that might be easier for you to manage than paying a larger lump-sum deductible in the event of a claim. When choosing your deductible, be sure to consider your financial situation and think about how much you can afford to pay out-of-pocket if you ever need to make a home insurance claim.

Plus, if you’re looking for ways to save money on our home insurance, you may qualify for some of these home insurance discounts.

Mistake 2: Renovating your home and not letting your insurance provider know.

When buying home insurance, your insurance advisor will take the details of your home and use valuation software to determine its replacement cost. However, you need to be mindful of the limit of insurance if you have made any renovations or additions to your home. Over the last 18 months, the overall cost of building homes in Nova Scotia has increased substantially. So to avoid potential financial trouble down the road be sure to ask your home insurance advisor if your insurance policy limits are right for you and your home if it has been upgraded.

Mistake 3: Under insuring your personal belongings.

When buying home insurance, your personal belongs and home contents are based on the value of the home.  However, you can increase this limit if you feel its not accurate. Your belongings could be worth more than your policy states when you add them all up. It is a good idea to take the time to prepare a home inventory. Once you’ve completed a detailed home inventory, you can assess if your personal belongings limit is appropriate. And, certain high-value items might also require special coverage regardless of your policy limits, so be sure to ask your insurance advisor and get those covered, too. For a little more insight, check out this blog for 10 surprising things commonly covered by your home insurance.

Mistake 4: Assuming your policy covers flooding or overland water damage.

Many homeowners are not aware that home insurance does not automatically include flooding and overland water damage coverage. Most standard home insurance policies do cover some types of water damage such as damage caused by burst pipes or malfunctioning appliances. However, damage caused by water that enters your home from external sources (during heavy rainfall, a quick spring thaw, a sewer backup, or a sump pump failure, for example) is generally not covered. Flood insurance covers your property and/or contents against storm surges and flooding during torrential rains, hurricanes, and tropical storms. Be sure to ask your insurance advisor for a thorough explanation of your water damage coverage.

Every home, homeowner, and home insurance policy is unique. Remember, when purchasing home insurance there is no one size fits all. Our knowledgeable insurance advisors will help you get the right home insurance policy for you. For more insurance tips, visit our web page to get answers to some of our most frequently asked questions on Home Insurance or to request an insurance quote.

~ Your Bauld Insurance Advisors