When Cheap Isn’t Always The Best Answer: Be Careful of Homeowners Insurance Mail Offers

• Coverage Options
• 06.06.2025

By Sheryl Homer

Last weekend, I received a mailing from an insurance agent offering homeowners insurance with a surprisingly low premium. This mailer was from an agent based outside of Lincoln, and as I looked closer at the offer, the alarms went off in my head.

The mailing promoted affordable coverage, but what really stood out was the very low dwelling coverage limit—the amount the insurer would pay to rebuild my home if it were completely destroyed. This figure was drastically below what it should be.

Rising Construction Costs Mean Higher Coverage Needs

The majority of people have heard through the media and other sources that the cost of construction has significantly increased over the past couple of years due to inflation, cost of building materials, and labor prices, just to name a few factors. With the dwelling limit that was proposed to me in this mailing, along with the increased cost of construction, I would be severely uninsured in the event of a complete loss.

Low Premiums Can Mean High Risks

It is easy to see how someone might jump at the chance to lower their insurance premium, especially in today’s economy. But in the event of a major loss, such as a fire or severe storm, that low-limit policy could leave a homeowner financially stranded—without enough funds to rebuild.

Before signing on to a cheaper insurance offer, ask yourself:

• Is the dwelling coverage adequate? If it’s too low, you could be severely underinsured.
• Are critical coverages included? Some policies exclude important coverages, such as water backup or service line coverage.
• What’s the deductible? A bargain policy may have a high deductible, making claims more costly for you.
• Is this insurer reliable? Look at reviews and financial ratings to ensure you’re working with a trustworthy company.

Don’t Let a Cheap Policy Cost You More in the Long Run

Adequate protection should be a priority over cutting corners, as “affordable coverage” can ultimately prove more costly. While a lower premium might seem like a smart financial move at first, it could leave you dangerously exposed in the event of a disaster. The reality is that rebuilding a home after a fire, severe storm, or other catastrophe requires extensive financial resources—resources that an underinsured policy may not provide.

A complete loss of your home is traumatizing by itself, both emotionally and physically. The last thing any homeowner needs in that moment is the additional burden of scrambling to cover rebuilding costs out of pocket.

Smart Insurance Choices Start with Awareness

Getting insurance mailers is common, and not all of them are bad. But it’s very important to evaluate these offers. Don’t get lured in by the price without understanding what you’re actually buying. Always compare coverages, and when in doubt, talk to an independent insurance agent who can help you find a policy that protects what matters most.