Homeowners insurance is to protect you from a natural disaster such as a tornado or an earthquake. In order to make sure you have adequate protection, you must be aware of what's covered in your plan. When evaluating your plan you should consider these five points:

1. You May Be Paying Too Much

The CR reports that homeowners do not typically shop around for insurance. Since homeowners insurance is not as "price-competitive" as auto insurance, fewer people take the time to search through several plans and see what is available.   However, you may be able to save hundreds or thousands by evaluating more options.

When looking for homeowners insurance, you are required to take an assessment of your risks and coverage needs. You will need to account for your home's square footage, age, construction, and ask for a reconstruction-value estimate. CR advises shopping for an independent company so they can compare premiums. TrustedChoice is a highly recommended site where you can find an independent agent. 

2. You May Not Have Enough Coverage

An estimated 60% of Americans are underinsured. Most homeowners don't realize that homeowners insurance doesn't cover everything.  For instance, flood insurance is covered through a separate network, not homeowners insurance. 

Your agent can help you find an adequate flood and earthquake policy. If you are in a high-risk area for hurricanes, you should also consider hurricane insurance. Sewage insurance is also something you should consider when purchasing a plan. 

Basic coverage includes structural damage, personal liability, pet related damages, and living expenses if your house is severely damaged.

3. Do Not File a Claim for Small Incidents

Your premium could increase if you file a claim, even if it is for minor repairs. However, a survey found that 57% of those who filed a claim valuing under $5,000 in repairs did not receive an increase in premiums. Check with your agent to see if your premium will increase. 

4. Consider Flood Insurance

Even if you don't live near the ocean, flood insurance is a worthy investment. Your water resources such as washing machines, sinks, or tubs could result in a water damage issue. On the Pacific West Coast, 43% of losses were caused by water damage within the home. The National Flood Insurance Program (NFIP) received over 20% of claims from individuals who were outside of the Special Flood Hazard areas. Hurricanes can also result in water damage, even if you are not in a high-risk area. 

Talk to your agent about receiving a flood insurance plan from NFIP. Plans might be pricey, but it is better to be safe than sorry.

5. Hail Might Not be Covered in Your Policy

Thirty-two of surveyed claimants, according to CR.com, obtained losses from hail. Hail is not covered by most homeowners insurance plans. Hail can cause dents in aluminum siding, shatter windows, destroy rooting, etc. This is not structural damage, but cosmetic damage, which is not covered in all policies.

When shopping for insurance, consider purchasing cosmetic damage coverage to ensure safety to your home during a hail storm. Insurers who sell "percentage deductibles for hail damage" should be avoided. For example, if a house is insured for $500,000, 1% equals a $5,000 deductible for you to pay, out-of-pocket. Find a predetermined dollar deductible for hail damage.

For more information about things to look out for when purchasing homeowners insurance, click here.

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