Homeowner's insurance policies are complicated, and because of this many people trust their insurance agent to know what type of coverage they need. However, if you don't know what your policy covers, you could be putting your home and your family's livelihood at risk. Before you purchase a new policy, learn about these three common home insurance mistakes and discover what you can do to avoid them

Not Purchasing Flood Coverage

A lot of people assume that their homeowner's insurance policy automatically covers flood damage. However, in most cases, this isn't true. In order for your home to be covered in the event of a flood, you need to purchase an additional flood insurance policy. Keep in mind that flood damage is described as any damage that occurs from rising water. This includes water damage that occurs during or after a hurricane.

Underinsuring Your Home

Most people assume that you need to insure your home for the purchase price, but that's not true. To make sure you have enough coverage, you need to insure your home for the amount it would cost you to rebuild your home in the event of a total loss. In most cases, this price isn't the same as the amount that you owe on your home. In fact, if you put a decent down payment on your house, you probably need to insure your home for more than the amount that you owe the mortgage company.

When you talk to your insurance agent, he'll ask you a series of questions about your house, including the type of material used to build your home, the square footage of your home, and the year your home was built. All of this information is used to determine how much it would cost for you to rebuild your home, using the same type of materials, at current building rates.

Not Purchasing Sewer Backup Coverage

You may think that things can't get worse than sewage backing up into your home. However, they can, and will, if you don't have sewer backup coverage on your homeowner's insurance policy. Many home insurance companies offer sewer backup coverage, which also covers damage caused by a malfunctioning sump pump, for an additional cost. You should consider purchasing this coverage, especially if you own an older home or have a sump pump in your basement.

Most people don't know a lot about how home insurance policies work, so it's common for people to not have enough coverage or not have the right type of coverage without knowing it. If you don't know what your homeowner's insurance policy covers, review the fine print and call your insurance agent, like those at Farmers Insurance Group, to answer any questions you have.