17 Common Home Insurance Myths That You Should Be Aware Of
Many people hear home insurance myths all their lives before buying a home, only to find out home insurance is much different than they thought. Here are common myths to watch out for when assessing what type of home insurance policy you need.
You’re required to purchase home insurance
One of the most widespread home insurance myths is that you are legally required to purchase it. There are no states that currently require homeowners to enroll in an insurance policy. Nonetheless, you may be required by a mortgage lender to carry home insurance in order to secure financing.
While on vacation, your home is covered
Your home might be covered while you’re away on vacation if you take proper steps to prevent disasters such as pipe leaks or flooding. It’s important to shut off the water, which helps prevent pipes from bursting in the winter. You should also ensure your home’s heating is maintained at a certain level without running up energy bills.
All your valuable possessions are automatically covered
While a homeowners insurance plan covers most of the contents within a home, certain items might need special appraisals. It’s helpful to give your insurance agent an inventory list of your possessions and discuss which items need special coverage. Jewelry and sentimental items that are difficult to price should be evaluated by the appraiser.
Your home policy isn’t affected by current events
Current events actually play an understated role in insurance coverage. The COVID-19 outbreak led to many people staying at home due to state and local government mandates. Inviting people over for gatherings that lead to COVID-19 hospitalization cases during this time might not be covered as a result.
A standard homeowners insurance plan covers all forms of flooding
Another one of the most distorted homeowners insurance myths involves flooding, which usually isn’t covered in a standard plan, with a few exceptions. Broken pipes might be covered if the damage did not result from neglect. You will likely need special flooding coverage, especially in a market with a history of regular flooding.
Home insurance coverage is limited to the house
A standard homeowners insurance policy covers your house, its contents, and other structures on your property. It also provides living expenses if you are ever forced out of your home due to a covered peril.
The market value of my house is protected by home insurance
Your home insurance plan doesn’t protect the market value of your home, but it will pay the costs to restore your home to its previous state following a disaster. Since rebuilding costs don’t include land value, its costs will be lower than the market value of the total property.
Regardless of where you live, home insurance covers earthquakes
Earthquakes are extreme perils; therefore, they are not covered in a standard home plan. You need a special earthquake extension to your plan if you live in a zone with regular seismic activity.
Insurance costs are lower for older, cheaper homes
You may actually pay more for insurance if you buy an older, cheaper home. Such homes tend to require excessive maintenance and typically aren’t compliant with current building codes. Old plumbing can be a costly upgrading issue at some point, which is why the insurer will likely charge higher premiums.
Damage caused by insects is covered by home insurance
Even though termites pose problems for many homeowners, the damage they cause eating through wood usually isn’t covered in a standard plan. You’ll need special coverage to protect against termites and other insects.
Condominiums are covered by the corporate owner
The property owner of a condominium complex typically insures the structure, exterior, roof, and other building elements. This insurance won’t cover your personal belongings if you’re a renter. To have your possessions covered, you must purchase additional coverage.
A landlord’s insurance covers everything for tenants
As a tenant, you’ll be responsible for protecting your own valuables. You will also need your own liability insurance to cover accidents that may occur to others in your unit.
Home insurance doesn’t cover damage from natural disasters
Actually, home insurance covers a wide range of damage from storms and fires. Usually, the stated perils are very specific and may include exclusions.
Getting sued after engaging in a fight will be covered by home insurance
Your home insurance policy does cover certain personal liabilities of an accidental nature but not intentional damage to others.
If your dog attacks someone, home insurance won’t cover it
Many insurers charge higher rates for dog owners. They will examine your application, allowing you coverage for dog bites in certain situations.
Climate change does not have any effect on anyone’s home insurance
Climate change is another current issue that can lead to changes in your homeowners’ policy. It’s causing unpredictable fires and flooding even in places where these disasters have been rare. Consequently, insurance companies will be very careful about the wording in policies relating to climate change.
Accidents during home renovations are covered by your standard plan
It depends on what the policy says. Some standard home policies may cover damage during renovation, but it typically requires special coverage.
Seeing through home insurance myths is an advantageous approach to home buying. You certainly need to read the policy closely before signing, and along the way you should ask your insurance agent questions to ensure clarity. Contact us at Jack Stone Insurance Agency to learn more about homeowners insurance in Brentwood, CA.
