Costly Home Insurance Mistake
When people buy a new home, they need to get homeowner's insurance, but many of them make a costly mistake. They insure their homes for the mortgage balance.
Why is this a mistake? Because when you buy a house, you're buying the property underneath it. That property is still going to be yours if there is a hurricane, earthquake, or other natural disaster. What you really need to cover is the cost of rebuilding your house and recovering your belonings. Depending on where you live, you could be paying 100,000s just for the land. That's not something you need to insure with homeowner's insurance.
Remember, when you're shopping for home insurance, you just want to cover the home's market value, and don't worry about the indestructable land your house is perched upon.
Even if you already have an insurance policy where you paid for the land, it's not too late to change. You can get quotes online from several insurers:
This is a really good point. I live in the midwest and we are constantly faced with insurance for hail damage, wind damage, flood damage, etc. I never thought about the land itself. Thanks for the tip.
Posted by: Kristen | November 08, 2006 at 04:23 PM