Debunking 5 Common Home Insurance Myths

Your home is your single largest and most important investment. It is also a safe haven for your family. These two facts alone dictate that you should be as informed as possible on your homeowner’s insurance, the amount and types of coverage you have, and any special conditions that exist in your policy. Despite the importance of home insurance, many people operate under some common misconceptions when it comes to their policies.
Here are 5 common home insurance myths debunked.

1) Flood Damage is Covered by Most Homeowner’s Insurance Policies
Home insurance does not cover damages caused by flooding. In order to be covered for flooding, homeowner’s must purchase a separate insurance policy. Another related misconception is that flood insurance is only for those living in a flood zone. This too is untrue. As recent severe weather has proven, flooding can happen in homes that are well removed from flood-zones or waterways. Its best that you sit down with your agent and review your coverage needs regarding flooding.

2) Your Coverage is Based on the Price You Paid for the Home
The insurance coverage on a dwelling is actually based on the replacement cost of the home and is completely independent of the price you paid. Land value is also likely not included in the coverage. The square footage of the home and the current construction costs will dictate the replacement value.

3) Your Premium Goes Up Every Time You File a Claim
Filing a single claim on your homeowner’s insurance policy will not necessarily dictate in an increase in your premiums. However, filing multiple claims is more likely to increase your premiums and that is why you should always consider the cost of repairs and your deductible before filing minor claims. They may end up costing you more in the long run in terms of increased premiums.

4) Homeowner’s Insurance Covers all of Your Valuables
Home insurance typically limits the amount of coverage for valuables and you are sometimes required to get separate policy riders for big ticket items like expensive jewelry, art or furs. If you have certain valuable items that might be in danger of falling out of your coverage amount, be sure to review them with your agent and purchase additional coverage as needed.

5) You Can’t Lower Your Insurance Premium Without Reducing Coverage
There are actually many ways to lower your insurance premium and reducing the amount of your coverage is usually not a good idea. Unless you have unnecessary coverage, you should look to lower your premium through other means like increasing your deductible, making home improvements, installing a security system, or even bundling your home, life and auto insurance together. The last thing you want to do is have your home inadequately covered.

Being aware of your coverage and the specifics of your homeowner’s insurance policy will reduce the likelihood that you’ll find yourself unprepared in the event of a disaster or break-in. You want to make sure your home is covered to the fullest extent possible without introducing unnecessary coverage. You’ll also want to be sure you aren’t paying more than you have to for your homeowner’s insurance policy. Reviewing your policy could be an unexpected avenue for saving money. And being knowledgeable about the insurance on your home just makes sense.

 

This article was written by Frank McKendry, who is the primary writer for buyhomeinsurance.net, which specializes in home insurance rates and quotes.

 

 

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