Colleyville is a city located in Tarrant county of Texas. The city offers its residents a rural feel, and unlike metropolitan cities, most residents of the city own their homes. Though the city is considered one of the best places to live in Texas, one should not forget about natural calamities that can strike the region. As per recent data, the risk of tornado damage in Colleyville is much higher than the Texas average.
Living in a place with such a potential threat makes taking enough safety measures imperative. A crucial investment that the residents of the city need to make in Colleyville home insurance. A good home insurance plan can protect your home from perils like fire and lightning, hail or windstorms, smoke, falling objects, and other hazards, as stated in the insurance policy.
There are numerous home insurance policies available in the market which makes picking the right one a daunting task. Here are mistakes you need to avoid when buying home insurance.
Underinsuring Home to Save Money
Home insurance coverage varies and is directly proportional to the cost. Low-cost home insurance offers the least coverage and vice versa. If you sacrifice coverage to save money, the insurance company will not pay the entire amount that may be required to rebuild your house if it is destroyed by the earthquake.
Not Understanding Home Insurance Terms
Colleyville home insurance has several levels of coverage which includes replacement costs and actual cash value. You need to understand important insurance terms to select the right home insurance coverage.
Actual value costs and replacement costs are two important insurance terms. Actual value costs mean the insurance company will consider depreciation while valuing your home and belongings. It will not pay what you paid to buy the items or build a house but pay the current market value.
Replacement costs ensure the insurance company pays the money required to build your house after a natural calamity. It will not consider depreciation while paying for the damages.
Failing to Understand Exclusions
Many people have a misunderstanding that insurance policy covers everything, which is not valid. Every insurance policy has limits and exclusions mentioned in the policy document. For example, basic home insurance coverage might pay for the flooding damage caused by burst pipes but may exclude floods from outside.
As per recent data, 283 properties of Colleyville have a 26% greater chance of being affected by flooding in the next 30 years. According to experts, flooding risks cannot be eliminated. To be on the safer side, you need to take adequate home insurance coverage that protects your home from flood damage.
Assuming Your Policy Has Flat Rate Deductible
Deductibles refer to the amount you will pay out of your pocket to cover the loss. For example, if the deductible is $500 and the total claim is $10,000, the insurance company will only pay $9500 for the damages. Every home insurance policy has deductibles like hurricane deductibles and wind/hail deductibles.
Many people assume their home insurance policy has a flat-rate deductible. If you live in an area that is hit by hurricanes often, the insurance company might raise the hurricane deductible while keeping the wind deductible lower.
Many home insurance policies mention deductible in a percentage that can range from 2 to 10% or higher. Check the policy documents to understand the different deductible rates.
While insurance policies offer great relief in moments of need, one’s own negligence and lack of knowledge can make them unfruitful or insufficient. There, it is wise to avoid these mistakes when buying a home insurance policy.