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Homeowners Insurance Myths Debunked

Homeowners Insurance Myths Debunked

If you’re like most people, your house is the most expensive thing you own. And, when hundreds of thousands of dollars are at stake, it’s important that you’re doing everything you can to protect your investment. That’s where home insurance comes in. Without it, your greatest asset is left vulnerable to things like floods, fires, and theft. When it comes to home insurance, there are a number of misconceptions that cause confusion for new and experienced homeowners alike. We’re here to debunk some of the most popular homeowners insurance myths in order to help you protect your home and its contents.

Myth No. 1: Standard home insurance covers flooding.

This is one of the most common (and potentially costly) misconceptions when it comes to home insurance. The reality is — it depends on cause of the flooding, as well as your coverage. If, for example, you have water damage from a sewer back-up, then yes — you’ll most likely be covered. On the other hand, if a river overflows and floods your basement, coverage is unlikely under a standard home insurance policy. Damage from naturally-occuring flooding is an additional coverage that you can add but is usually not added by default.

Myth No. 2: I don’t need flood insurance unless I live in a flood zone.

… Speaking of floods, flood insurance is typically recommended even to those who don’t live in a designated flood zone. In reality, flooding can occur anywhere. Better safe than sorry.

Myth No. 3: Damage from mold is covered by standard home insurance.

Again, this is one of those “yes… and no” answers at the root of many homeowner insurance misconceptions. In many cases, mold is covered but only when it’s the result of water damage. If, on the other hand, the mold is a byproduct of improper maintenance, a mold claim may be denied.

Myth No. 4: Homeowners insurance covers everything I own.

Unfortunately, this is incorrect. Like any other type of insurance, home insurance has its limits and doesn’t cover all of your possessions. Usually, homeowners insurance covers personal property up to a point. Your policy will specify this as a maximum dollar amount or as a percentage of your total home insurance policy value. You may have the option to increase your personal property limit to make sure that everything you own is properly covered.

Myth No. 5: Home insurance covers all injuries within my home.

There’s one major caveat here. If somebody else gets injured at your home, your policy’s liability coverage will most likely kick in. However, if you or a family members gets injured, that’s a different story. In that case, your health insurance and not your home insurance would help to cover you or your family member’s medical expenses from injuries.

Myth No. 6: My at-home business is covered by my home insurance policy.

According to the Independent Insurance Agents & Brokers of America, 61% of home-based businesses in America lack adequate business insurance. This may be due to the misconception that home-based businesses are covered under home insurance. Unfortunately, this is typically not the case. To cover business liability and business equipment, home-business owners are often required to purchase a separate insurance policy for their business.

Myth No. 7: By law, I must have home insurance.

By law, you are not required to have home insurance if your house is paid in full (in other words, if you don’t have a mortgage). However, we strongly recommend against this. Not having home insurance puts you at great risk should something happen to your home and its contents.

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