Did you ever hear the myth about homeowners insurance that it covers every disaster or loss imaginable? Those who believe this misconception usually find out too late that their policy doesn’t cover many ‘presumed to be covered’ disasters. To prevent surprise costs, you need to be clear about the terms before you agree to them. Here are 4 common myths about home insurance that you should be aware of:
1. Coverage Against All Floods:
People who haven’t taken the time to understand the terms of their standard homeowners insurance might assume that flooding is automatically covered. Though the policy may cover other major disasters, such as hurricanes and tornadoes, flooding is never a part of the standard plan. If your home is in a flood risk area, you need to talk with an insurance specialist who can tell you about your options.
Debunking the homeowner insurance myth about flood coverage is crucial in the current age of increased floods caused by climate change. Before you move to a new location, you should learn about its flooding history and the potential for future flooding. A home built on a low elevation near a water body could conceivably be adversely affected by flooding someday.
2. Coverage for All Valuable Possessions:
Another homeowners insurance myth is the notion that a standard homeowners insurance policy covers all your belongings. The policy may indeed cover many major items, such as furniture and equipment, but the coverage has specific limits. It might not apply to certain types of jewelry or other items, so you may only receive a partial amount for valuable items.
Protection of all your valuable property requires getting them appraised, which means going through an appraisal process for a special policy. This process is called a personal property endorsement or floater. It ultimately lists your items on file for home inventory with the insurance company.
3. Coverage for All Rebuilding Costs:
Myths also surround how much payout a homeowner receives if a disaster destroys their home. You should not expect the insurance company to pay for the current market value of the house as you will be paid according to rebuilding costs. These costs can be affected by numerous factors, such as the rising cost or labor, materials, and meeting building codes.
By talking with your insurance provider each year, you can get updated on these costs and whether or not you have sufficient coverage. Paying a little extra in premiums can go a long way in case a catastrophic event occurs.
What Renters Can Do for Protection
Renters must be aware of how their valuable possessions can be protected with the right insurance policy. Relying on the myth that the property owner has everything covered is a risky assumption. Most likely, you would need your own renters insurance to ensure that all your items are covered. Current premiums are around $180, which is worth the investment for valuable possessions.
4. Coverage Against All Mold and Termites/External Invaders:
Mold can be extremely damaging to a home due to the speed with which they spread. Some homeowners may assume that their standard plan naturally covers mold. However, since removing mold is considered part of maintenance, they need to supplement their plan with additional coverage.
Another maintenance issue not covered in a standard plan is damage caused by termites or other external invaders. Do not fall for the myth that these problems will be counted as natural disasters. Damage caused by environmental elements can cost thousands of dollars, so it’s important to know what’s covered before the degradation occurs. The best way out will be to talk with a trusted insurance professional.
Avoiding high out-of-pocket payments for home repairs begins with learning what is and isn’t a myth about homeowners insurance. Contact the experts at Udell Family Insurance for all your insurance needs and questions.