Buying your first home is exciting, but insurance often becomes an afterthought. Here are five mistakes we see Utah homeowners make.
1. Only Getting Minimum Life Insurance
Your lender requires homeowners insurance, but nobody requires enough life insurance to cover the mortgage. Your policy should cover the full mortgage balance plus 5-7 years of income replacement.
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2. Relying Only on Employer Coverage
Employer plans typically cover 1-2x salary. With a $500,000 mortgage and $100,000 employer coverage, you are significantly underinsured. Plus, if you leave the job, you lose the coverage.
3. Not Considering Disability Insurance
You are far more likely to be disabled during your working years than to die. If you cannot work for 6 months, can you still make the mortgage? Disability insurance replaces a portion of your income.
4. Waiting Too Long to Lock In Rates
Life insurance premiums increase with age. A 30-year-old pays roughly half what a 40-year-old pays for the same coverage. The best time to buy is when you are young and healthy.
5. Not Using an Independent Broker
A captive agent shows you one company. An independent broker shops multiple carriers for the best rate. The difference can be hundreds per year for the exact same policy.
