As a homeowner, obtaining insurance coverage is an important part of protecting your home and your belongings. Not only that, but most lenders require you to have homeowners insurance before they’ll provide financing. Even after you’ve paid off your mortgage, it’s vital that you keep your policy active so you don’t risk losing all that you’ve invested in your home.
That said, knowing what your policy actually does and doesn’t cover can be somewhat confusing. Knowing what affects your premiums and how protected you’ll be in the event of a disaster is something all homeowners should be aware of.
Homeowners Insurance Myths Debunked
Let’s take a moment to debunk the top five myths surrounding homeowners insurance:
- Myth #1: Your policy covers ALL your belongings. Insurers will put limits on coverage for certain possessions, like jewelry and other valuables or rare collections. Oftentimes you’ll need to purchase additional insurance for these types of items. This additional coverage is called an endorsement or “add-on”, and will cover the full value of those belongings should it get damaged in a fire or stolen.
- Myth #2: Standard homeowners insurance covers flood damage. Homeowners insurance does not cover damage from a flood. You’ll need to purchase an additional insurance policy specifically for flood damage, and this coverage isn’t limited to those who live in flood zones. Floods can happen anywhere!
- Myth #3: Purchasing an older home will save money on homeowners insurance. Insurance premiums are not cheaper for homes that have been standing for many years. Older houses will be evaluated on several factors, like the building materials used and repairs that may be needed down the road.
- Myth #4: An injury that occurs in the home will be covered by homeowners insurance. Don’t think that your homeowners insurance will cover medical bills or give you a payout if you’re injured within the home. While the liability portion will cover a guest who had an accident in your home, your own family’s medical bills will be left to your health insurance.
- Myth #5: The valuation of loss from the appraiser is final. When you file a claim, your insurance company will send out an appraiser to determine the extent of the damage and assess a value to your losses. However, you are able to negotiate that value if you can prove your items were valued higher. This is why it’s also important to document your belongings, keeping not only an inventory list but also receipts and any corresponding paperwork that proves the value of the item.
When you’re obtaining a new homeowners insurance policy, make sure to read it through thoroughly and ask any questions you might have. If you see any exclusions or note that certain items aren’t covered, ask about the separate add-ons that can be attached to your policy.
For more information about homeowners insurance, be sure to check out the FAQ section on our website. Or, if you have any questions about your current policy or obtaining a policy, contact Machor Sage today!