Common Myths About Home Insurance Coverage

There are a lot of myths and misconceptions about homeowner’s insurance that can lead to people discovering they are not as covered as they thought when they suffer a loss. Many people think that since they pay their premium every month they are covered for whatever life throws at their home, but that is sadly not the case. Here are some of the myths and misconceptions often associated with homeowner’s insurance.

Flood damage is covered by a standard policy

Home Insurance policies do not cover flood damage. To have your home insured for flooding, you need to purchase a separate policy.

If you have a pipe burst and your basement is flooded with water, avoid using that term in your insurance claim. This is not technically flooding; flooding is when water rises from the ground.

The coverage limit should match your home’s value

It may seem like a smart move to have the coverage for your home set at your home’s current market value, but this is not the best idea. The amount it costs to rebuild your home after a loss may cost more or less than what your purchase price was. Try to have enough to rebuild and a little extra.

Medical expenses are covered

If your friend slips and falls on your property, your liability coverage will kick in and help pay for their medical expenses. However, if you slip and fall, your home insurance will not cover it.

The entire contents of the home is covered

Homeowner’s insurance has its limits, and it is not designed to cover absolutely everything in your home. It should help cover replacing your furniture, basic electronics, cookware, and other things, but it is not going to cover everything. If you own furs, a lot of fine jewelry, or expensive collectibles you should look into getting an additional personal property policy to help cover those; they are generally more expensive than what a standard home insurance policy covers.

Your business is covered

You have a little home business making jewelry and selling it online. There is a fire in your home and your inventory is completely destroyed, so you think your home insurance policy will cover it. This is not something that is usually covered in a home insurance policy; you need to get a separate policy for your business or get additional coverage for your home business.

Loss of use coverage

If your home is too damaged to live in until repairs are completed, you may be expecting your insurance to put you in a hotel until your home is livable again. While many home insurance policies will cover your living expenses while your home is getting repaired, not all will do so automatically. Take the time to make sure your insurance will cover these expenses.

You do not need an inventory of your possessions

When you file an insurance claim, you will be asked to include a list of the items you lost. Having a detailed inventory of your home will help you remember everything in case of a major loss. If you want to get reimbursed for the maximum amount possible, having this list will help.

Include photos with your inventory, since your insurance company will ask for proof of ownership.