Home Insurance Articles
3 Common Misconceptions About Home Insurance Policies
2010-07-02
One of the worst things that can happen to a family is to have their home damaged or destroyed. Not only does losing one's personal possessions hurt, but not having a place to live anymore can destroy a family. This is why it is so important to for everyone to look into understand their home insurance facts. Many people often found themselves misled about what their policy covers. The following are 3 common misconceptions about home insurance policies:
Most people think that their home insurance policies cover them if there is damage to the home due to flooding. Even a small amount of water flooding into the basement can cause thousands of dollars in damage to your home. Unfortunately, unless you have a specific flood insurance policy, the damage will not be covered. Anyone in a flood zone should have this added to the current policy and, even if you are not in the flood zone, be sure to check whether or not issues with water pipes or the sewer are covered under your policy.
Another mistaken belief is that a policy will automatically cover the home if there is a mold infestation. While your policy may, in fact, cover a small portion of it, if it was caused by water damage, the amount usually does not exceed $2,500. If your home was to have a major infestation, the cost would far exceed that amount. Regardless of the precautions you take against mold, it is always best to verify whether or not your plan covers this situation.
Unfortunately, many people often find out too late that their policy does not provide adequate coverage for their personal property. If your policy states "cash value", you should understand that this amount means that you will receive the amount to replace your items after the depreciation of the item. Replacement costs means exactly how much it would cost to replace the item. Always verify with your agent exactly what is covered to make sure you have adequate coverage.
Becoming a homeowner is a big responsibility and you will want to do whatever you can to protect your family and the home they live in. By understanding all of your home insurance facts, you can make educated decisions regarding your home insurance policies. The worst possible situation is finding out that you are not properly covered after your home has been damaged or has been destroyed completely. These situations are stressful enough, without adding the worries of not knowing whether your home is covered or not.