Buying a property for the first time is confusing as it is.
There are a lot of things to understand in order for a first-time buyer to complete the process of purchasing a property smoothly. Of course, finding the right property to buy is only the beginning. First-time homeowners need to complete the necessary steps to secure financing and complete the transfer of ownership.
There is another part of that equation, and that is securing a homeowner’s insurance. Buying home insurance for the first time also means doing a lot of research and comparing quotes. Unfortunately, there are still a lot of homeowners making a common insurance mistakes on the market right now.
Not Doing Enough Research
Homeowners find it incredibly tempting to go for the first insurance offer they come across. However, this often lead to some serious insurance mistakes, including not getting sufficient coverage and not getting the best deal on the coverage they need.
Research is everything. Experts in the insurance industry always advise customers to do their own research before making insurance-related decisions. Doing that research is also easy with the wealth of tools and resources currently available.
There is no need for customers to manually ask for quotes now that internet tools for getting them are available. Comparing insurance offers is also easy when done using the same tools.
Insufficient coverage is another common mistake first-time homeowners make when buying home insurance for their properties. Calculating the right amount of coverage needed based on the value of the property and the personal belongings stored in it can be complicated, which is why a lot of first-time property buyers simply go with an incorrect estimate.
This is a mistake that the industry is trying to rectify as well. There are two main types of home insurance that cover the building itself and the contents respectively. Insurance professionals are helping educate the market about these two types of home insurance coverage and how each can benefit the customers.
The growing number of financing options available to first-time property buyers leads to a serious hike in the number of people entering the property market. At the same time, more financing options means more variants when it comes to the offers and facilities included by financial institutions.
While mistakes like insuring the property twice because an insurance policy is already included in the mortgage loan are relatively minor, they are common on the market nonetheless. For this type of mistake, the insurance industry doesn’t have a clear solution yet.
Experts believe that working with stakeholders like a local finance broker and educating the customers directly are how these mistakes can be eliminated from the market. Investing in educating the customers is considered necessary since smarter customers are always better for the industry.
An independent, local finance broker or agency is more effective in helping customers find the right financing option while understanding their insurance needs based on the property they are buying. Every stakeholder, including industry players, must take part in creating a more conducive market where customers can avoid making these common insurance mistakes.