Ten Home Insurance Myths

Here are the most common home insurance myths:

Myth #1: Flood damage is covered by standard homeowners insurance.
Fact: Home insurance doesn't cover flood damage. A separate flood insurance policy must be purchased in addition to your standard policy in order to be covered.

Myth #2: My medical expenses are covered in case of injury.
Fact: The medical payment portion of your home insurance is designed to protect you if a guest gets hurt on your property. You and your family are not covered in case of injury on your own property.

Myth #3: Making an inventory list of your possessions is a waste of time.
Fact: An inventory list is the proof of your ownership. When you file a claim, you will be asked to list all the items that were lost. To make sure that you don't forget anything and to maximize your reimbursement, prepare the list of your possessions ahead of time.

Myth #4: The premium goes up every time a claim is filed.
Fact: A single claim may not result in a premium increase. However, filing multiple claims may increase your premium. Always estimate costs of repairs before filing a claim. If the cost isn't much higher than your deductible, then it is more reasonable to pay for it yourself, rather than filing a claim.

Myth #5: Home insurance covers all valuables, including jewelry and furs.
Fact: Home insurance has a limit on the amount of coverage for valuables. If particular possessions are worth more than that amount, you should purchase additional coverage for those items.

Myth #6: Home insurance covers damage caused by lack of maintenance, including mold.
Fact: Home insurance does not cover mold or other damages caused by poor maintenance. You are responsible for the maintenance of your home. That is one way to prevent major repairs and to keep your home safe for all.

Myth #7: Flood insurance is only for those who live in flood zones.
Fact: Floods can happen anywhere, not just in a flood zone. A standard homeowners insurance policy doesn't cover damage caused by flooding. Flood insurance will keep you covered.

Myth #8: To lower your insurance premium, you have to lower coverage.
Fact: Reducing your insurance coverage in order to save on your premium is a bad idea. You should always be adequately insured. To keep your premium low, learn what options you qualify for that might lower your premium. For example, you can increase the deductible or install a burglar alarm system.

Myth #9: Dwelling coverage amount is based on the purchase price of your home.
Fact: Your dwelling coverage should be based on the replacement cost of your home. It doesn't need to include the land part of your property. Replacement cost is usually calculated by multiplying the square footage of the home by current local construction costs.

Myth #10: You cannot buy a home without buying home insurance.
Fact: If you have a mortgage most lenders may require you to purchase home insurance, but it is usually up to the homeowner to get proper insurance.

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