At Mercer Agency, we talk with homeowners every day who want peace of mind knowing their home — likely their biggest investment — is properly protected. Unfortunately, we also see where things go wrong. The good news? Most mistakes are 100% avoidable with the right coverage and a little bit of education.
If you’re a Michigan homeowner, this quick guide will help you understand the most common mistakes we see — and how to avoid them — so you can feel confident that your home and family are protected.
1. Insuring for Market Value Instead of Replacement Cost
This is one of the biggest pitfalls we see. Many homeowners think they should insure their home for what they could sell it for. But your home insurance policy should cover the cost to rebuild — not the current real estate market price.
Market value can fluctuate, but the cost of labor and materials to rebuild usually goes up. If you only insure for market value, you could come up short if you ever have a total loss.
Pro Tip: Ask your insurance agent if your policy uses replacement cost coverage and how often it’s reviewed to keep up with inflation.
2. Forgetting to Update Coverage After Renovations
New kitchen? Finished basement? Added a deck? Congrats! But don’t forget to tell your insurance agent. Upgrades can increase your home’s replacement cost — and if you don’t adjust your policy, you might not have enough coverage if you file a claim.
3. Choosing the Cheapest Policy
It’s tempting to shop for the lowest price, but with home insurance, you usually get what you pay for. Low-cost policies often come with higher deductibles, limited coverage, or exclusions that can cost you more in the long run.
Better Approach: Look for the best value — a balance of price, coverage, and service. At Mercer Agency, we shop multiple carriers to find coverage that protects your home without breaking your budget.
4. Not Understanding What’s Actually Covered
Many homeowners assume their policy covers everything. The truth? Standard policies have exclusions. For example:
- Flood damage is usually not included.
- Sewer backup often requires an add-on.
- High-value items (jewelry, collectibles) may have coverage limits.
Knowing what’s covered (and what’s not) helps you avoid expensive surprises.
5. Skipping Liability Coverage
Liability coverage protects you if someone is injured on your property or you accidentally cause damage to someone else’s property. Many homeowners choose the lowest limit to save money — but lawsuits can get expensive quickly.
We typically recommend at least $500,000–$1,000,000 in liability coverage, and in some cases, an umbrella policy for even more protection.
6. Not Reviewing Your Policy Annually
Life changes fast — and your insurance should keep up. Whether you’ve made updates to your home, changed who’s living there, or added new valuables, an annual insurance review helps ensure your coverage is still a good fit.
Mercer Agency offers complimentary policy reviews every year to keep you properly protected.
7. Not Bundling Policies
Bundling your home and auto insurance with the same carrier can save you money and simplify your coverage. Plus, it often unlocks additional benefits, like one deductible for claims that affect both your home and car.
Final Thoughts
Home insurance isn’t just about checking a box — it’s about protecting your home, your family, and your financial future. Avoiding these common mistakes can make all the difference if disaster strikes.
If you’re wondering whether your current coverage is truly protecting you, we’d love to help. Visit www.merceragencygp.com or give us a call to schedule your free home insurance review.