10 Home Insurance Myths You Should NOT Believe

There are a variety of myths out there that can make home insurance very confusing.

Home insurance can be a complicated subject and there are a variety of myths out there that can make the subject even more confusing. Here are a few of the most common myths related to homeowners insurance as well as the myth busting facts for each one.

Home Insurance is Mandatory: While certain auto insurance coverages are required in every state, the same is not true for homeowners insurance. State and federal governments do not force homeowners to carry an insurance policy on their home. However, unless you own your home outright, your mortgage company will require you to carry a homeowners policy in order to protect their asset.

Even if you own your home free and clear, unless you can easily afford to rebuild your home and replace all of your possessions, experts recommend carrying coverage.

All My Valuables are Covered: Standard homeowner policies will cover all of your personal property but in most cases there are limits to coverage on certain types of property. High-value items such as jewelry, collectibles, art, wine and even cigars have coverage level caps. The value cap will vary by policy but in most cases it is around $1,500. If you own property that falls into these categories that is valued at more than $1,500 you will need a rider to be fully protected.

Sewer Backup is Covered: This type of coverage is usually available as a rider or for an extra fee but it does not come standard on most homeowner policies. This type of claim occurs when storm sewer systems cannot handle the volume of water going down them and the water and sewage backs up into your home. It can be messy and costly to repair.

Flood Damage is Covered: Damage by floodwaters is never covered by a homeowners insurance policy. All homeowner policies exclude flood damage. If you live in a flood prone area you will need to purchase a separate flood policy, which is available from the National Flood Insurance Program or certain private insurers. Depending on where your home is located, flood insurance can be fairly expensive. Before purchasing a home be sure to get a flood insurance quote make sure you can afford the coverage.

Earthquake Damage is Covered: Just like flood damage, a standard homeowners policy always excludes earthquake damage. In order to be protected against earthquakes you must add a rider to your homeowners policy or by a separate earthquake policy.

Coverage Only Extends to the Home: Many people think that homeowners insurance only covers the cost to rebuild their home. In fact, a homeowners insurance policy also covers your contents, as well as offering personal liability insurance. In many cases the policy will also protect other structures on your property such as barns, sheds and even guest homes.

Older Homes are Cheaper to Insure: The truth is, older homes tend to be more expensive to insure because there is a much higher chance of things going wrong which can lead to a claim. Older electrical systems, furnaces and pipes can lead to mechanical failures resulting in expensive damage to the home. If you own an older home or are looking to buy one, expect to pay more for coverage unless it has recently been updated.

My Home is Insured for Market Value: This one is definitely false. Homeowners insurance only covers the cost to rebuild your home, not the market value of your house. The value of the land that your house sits on is not included, because the land will not be destroyed if a fire or severe storms damages or destroys your home.

A homeowners policy will cover the cost to rebuild your home as it was before it was destroyed, up to your policy limits.

Fights are Covered: While a homeowners policy does offer liability coverage if someone is injured in your home, it does not cover intentional acts which means if you get in a fight with one of your guest or neighbors, you will be on the hook for medical expenses and the cost of any resulting lawsuits.

Termites are Covered: This can be an expensive mistake. Homeowners insurance is designed to cover sudden incidents, not infestations that can occur over months or years. If your home is infested by termites, rodents or other bugs, the bill to clear up the infestation will fall to you.

Homeowners insurance can be complicated and having a less than complete understanding of your coverage can be an expensive mistake. If you have any questions about your policy or coverage, contact HomeInsuranceKing.com as soon as possible to make sure you are fully protected.

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