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9 Myths about Homeowners Insurance

Homeowners insurance can be a tricky, confusing step in purchasing a house. Not knowing exactly what you’re looking for can be a great source of anxiety for home buyers, but with the proper information you can sail through the process with ease. Below, you will find nine myths that we have debunked along with some tips to ease your mind in the process of purchasing home insurance.

1. Homeowners insurance covers all of your valuables: The fact is, if you have possessions that exceed the amount of coverage for valuables then you can find your insurance falling short on coverage in times of disaster. Consider purchasing additional coverage for items of greater value and you can rest easier knowing you won’t have to come out of pocket later on.
2. You can’t purchase a house without having homeowners insurance: A lot of mortgage lenders will require that you have a policy in place before purchasing a home, but ultimately it’s up to you to seek out the proper insurance. Make sure you have a policy with the proper coverage and then purchase the house.
3. Your medical expenses are covered by homeowners insurance: You and your family are simply not covered in case of injury on your property. The medical payment section of your policy is there to protect you if a guest gets injured on your property.
4. Making a list of your possessions is not necessary and a waste of time: This is false. The list acts as an inventory of your belongings and will be extremely important if you lose those items. When filing a claim you will be asked to present this list of lost items for reimbursement. The best strategy is to make the list of items before a fire or other disaster claims them. This way you won’t forget anything.
5. Dwelling coverage amount is calculated by the purchase price of the house: The replacement cost of your house decides your dwelling coverage. This does not include the land your home is built on. To find your replacement cost, determine local construction costs and multiply that amount by the square footage of your home.
6. Lower coverage amount means lower insurance premium: There are options you have that can lower your premium without chopping your policy up. Installing a security system in your home is one option. Reducing your insurance coverage is a bad idea on something as important as your home. Ask your agent about more options to lower your premium without skimping on coverage.
7. Every time you file a claim, your premium goes up: Filing a claim is not a guarantee that your premium will go up. Filing multiple claims, however, can increase the risk of a higher premium. Decide if you should file a claim by calculating the cost of repair and comparing it with your deductible. If the cost of repair is not much higher than your deductible, pay for the repairs yourself and save on a premium spike.
8. Homeowners insurance covers damage due to lack of maintenance, or mold: You are responsible for the upkeep of your home, including preventing mold from entering your house. Preventative maintenance is a good habit as this prevents unnecessary major repairs down the road and improves the safety of your living environment.
9. Flood damage comes with standard home insurance: Homeowners insurance does not cover flood damage. A separate policy for flooding should be purchased along with your homeowners insurance policy to ensure that you are covered on all accounts.