3 homeowners insurance mistakes to avoid

Getting homeowners insurance is one of the best ways to protect your financial future. You might be tempted to rush through the process, but taking the time now will save you a headache in the future.

We've called out three costly mistakes homeowners should avoid when shopping for the right policy.

There are a few ways you may be underinsuring your property. If construction costs have risen, for example, your policy may not offer enough to cover the cost of rebuilding in the event of a major disaster.

You might also be underinsured if your policy only pays for the actual cash value (ACV) of repairs or replacements. If you file a claim for your eight-year-old refrigerator, for example, you'll only receive compensation based on how much it has depreciated over those eight years. To get enough from your insurer to buy a new refrigerator, you'll need a policy that reimburses based on replacement cost value (RCV).

Chubb offers RCV policies, as well as extended replacement cost coverage and programs that can secure your home from wildfires and other perils before they happen.

Standard homeowners insurance doesn't typically damage from floods or earthquakes and has limited coverage for high-value items like jewelry or fine art. You can expand what's covered, buy adding specific riders to your policy for an additional fee.

Be careful to navigate the line between having enough coverage and buying unnecessary endorsements you don't need.

Many insurance companies offer rate reductions to customers buying more than one kind of policy, most commonly homeowners and auto insurance. Known as bundling discounts, these programs can provide signifcant savings. Customers who bundle policies with Farmers Insurance save an average of 20%, for example.

Lemonade offers a bundling discount of up to 10% and, unlike other providers, makes it available if you have any combination of home, renters, auto, pet or term life insurance.

Just make certain the provider's rates are affordable in the first place and that the policies you're buying satisfy your needs.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of homeowners insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best homeowners insurance.

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