Home insurance myths can impact your coverage
There are enough real variables to consider when purchasing home insurance that it’s important to put to rest the myths that only confuse the situation. Basing your decision on misconceptions can be costly – either up front in your premiums, or down the road when it comes to file a claim.
While the brokers and CSRS at DPM Insurance Group are available to assist you through the process any time you wish, we can quickly clear up a handful of the most prevalent myths tied to home insurance.
Myth: All personal property in the home is fully insured
While a home insurance package policy provides contents coverage for personal property, there are specific limits and exclusions. Many high-value items, such as jewelry, fine art, musical instruments, and electronics (among others) usually have a per-item and coverage cap.
If you want to make sure those types of things are covered for their full value, you may need to purchase additional coverage. As well, if you often work from home, you should know that business equipment owned by a company is not normally covered under a home policy. A business equipment endorsement may be needed for full home office coverage.
Myth: A home should be insured for the purchase price
It’s probably just because we work with such policies every day that this one surprises us so much, but how much it costs to buy a home is not the amount that it would cost to rebuild it from the ground up – and that’s the number insurance companies base their decision on when setting your rate.
There are many aspects tied to the market value of a home that have absolutely nothing to do with insurance: the value of the land, the location, the zoning designation of neighboring properties and more. If your home burns to the ground, those factors are not impacted whatsoever – only the structures on the property and the contents of those structures have been damaged. So, overall, a home should be insured for its replacement cost, not market value.
Myth: Water damage is covered by a basic home insurance policy
Generally speaking, only some forms of water damage will be covered by a basic home insurance policy. Let’s say a burst pipe causes sudden, accidental water damage. In that case, it’s quite likely the damage will be covered. But gradual water damage over time that’s caused by inadequate maintenance won’t be covered. You can also receive coverage for a sewer back-up, but only if you add this endorsement to your policy. (It’s optional, and you’ll have to pay for it.)
Overland flooding coverage is another form of water damage protection that can be added to your home insurance policy. This optional coverage might be best suited for those who live near bodies of water that could overflow onto the property.
Myth: Home insurance covers safety upgrades
If your roof is getting old, or a tree is dying and looks like it could fall and hit the house, home insurance is not going to cover the costs associated with fixing those things to prevent future loss. Your insurance policy is designed to return a home to a pre-loss state after an unexpected incident, like a fire or break-in. Normal maintenance of the home is the homeowner’s responsibility and not part of your insurance coverage.
Myth: Natural disaster-related damage is always covered
While it’s true that a lot of weather-related damage is covered by a home insurance policy, that doesn’t mean everything is. Wind, lightning, and hail damage re usually covered, but earthquakes are an example of things that typically are not. These things are all dependent on the specific terms of your policy. Additional optional coverage is normally needed to account for all potential natural disasters. That’s why we’re always reminding people that it’s important to be aware of the covered perils and exclusions so you truly understand what you’re protected against.
It’s important – both from a coverage aspect, and a cost of policy perspective – that homeowners understand what is and is not covered, and consider additional coverage, endorsements, or riders to protect what’s most important to them. If you’d like some assistance to review your current policy, or would like a no-obligation quote to insure your home, the brokers and CSRs at DPM Insurance Group are here to help. C lick here to contact the office nearest you: https://dpmins.com/locations/