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7 Essential Tips to Choose and Use the Right Home Insurance Policy

Home insurance can save the day when catastrophe strikes. Unfortunately, it can also make a bad situation worse if you make a claim and your policy isn't up to the standard you thought.

Here are seven tips for making sure your home insurance will be there for you when you need it most.

1) Think Carefully Before Bundling Policies

You can often save a few dollars by bundling several kinds of insurance together. For example, you could take out both your home and auto insurance from the same insurer, and receive a discount on each.

However, only do this if it makes sense, and not just because it saves you time and money. Getting two mediocre policies at a lower price may end up costing you more if you make a claim and find your coverage isn't up to scratch.

2) Shop Around

Comparison sites make it super-easy to find the lowest-priced policy, and it makes good sense to use them. However, that's not the end of shopping around.

Finding a policy that closely fits your needs and situation is just as important as paying a few bucks less, so compare policies on features as well as premiums. Don't pay for coverage you'll never claim on, and don't think it's worth paying less for an underpowered policy that doesn't give you all the coverage you might need.

3) Check for Discounts

Many insurers offer lower rates for seniors, for people with good credit, or for those who've installed security or safety features in their homes. Before signing up for a policy, check if there are any discounts available which you could be eligible for.

4) Set the Right Coverage Level

When deciding how much coverage to take out, be realistic about the value of your possessions. Under-insuring could leave you out of pocket if disaster strikes, while over-insuring will pump up your premiums for no good reason.

Before buying a policy, make a detailed list of all your possessions and how much they're worth, making sure any particularly valuable items are named individually on the policy.

5) Check for Disaster Exclusions

If you're in a flood risk area, make sure the policy will fully cover you for those unfortunate situations. The same goes if you live in a part of the country which can experience extreme weather events. You can't necessarily rely on your insurer to alert you to relevant disaster exclusions in advance.

6) Notify About Home Improvements

If you make any sizable home improvements after taking out a policy, then make sure your insurer knows about them. Some changes could invalidate your insurance, which you might not realize until a future claim is refused.

7) Document Your Claims Thoroughly

Lastly, if you need to make a claim, don't leave anything to chance. Photograph any damage as soon as possible after it happened, and make sure you take a note of any crime numbers or other details the insurer might need.

However, don't let gathering this evidence delay you for too long. It's better to lodge your claim in a timely manner and provide backup documents later than it is to let things linger and maybe miss the claim validity time limit.

The best home insurance policy is one which you never need to claim on. But doing your homework and choosing the right policy will mean you get the most value out of your premiums, and more importantly, are fully covered when you need to be.

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