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Home insurance myths that can impact your coverage

We’ve touched on this topic before, because the world of insurance can be a confusing place sometimes, and it doesn’t help when there are plenty of myths people spread under the guise of trying to be helpful with “advice”. But Insurance misconceptions can be costly, with homeowners either purchasing the wrong coverage or overpaying for their policy. Here’s some common myths in the insurance world.

Your home needs to be insured for the purchase price

Several factors determine the market value of a home, including the value of the land, the popularity of the neighbourhood, and even the view. But homes are insured for their replacement value, which does not include the land or the view, or anything other than the structures on the property and their contents. So, a home should be insured for replacement cost, not market value.

Water damage is covered under a basic policy

The truth is that only some forms of water damage are covered by home insurance policies. For example, if a burst pipe causes sudden water damage, the damage will most likely be covered. But gradual water damage that happens because of poor maintenance is not 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 you can add to your policy. This optional coverage is best suited for those who live near fresh bodies of water that could overflow onto the property.

Home insurance covers safety upgrades

If your roof is getting old, or a tree is dying and poses a risk of falling, home insurance is not meant to cover wear and tear or prevent losses. It exists to return a home to a pre-loss state after an unexpected occurrence, such as a fire or theft. Maintenance of the home is the homeowner’s responsibility and not part of the insurance coverage.

Natural disaster-related damage is always covered

Yes, there are several kinds of nature and weather-related damage that is covered under a home insurance policy, but not everything is. Wind, lightning, and hail damage may be covered, while earthquakes are generally not. It depends on the terms of the policy. Extra coverage is usually required to account for all potential natural disasters. It’s important to be aware of the covered perils and exclusions to understand what you’re protected against.

All personal property in the home is fully insured

Your home insurance policy has contents coverage for personal property, but there are limits and exclusions. High-value items, such as jewelry, fine art, musical instruments, and electronics usually have a per-item coverage cap. To cover these items to the extent of their full value, additional coverage may be required. It’s also important to note that business equipment owned by a company is not generally covered under a home policy, depending on how often you work from home. A business equipment endorsement may be needed for full home office coverage.

It’s important for homeowners to fully understand what is and is not covered, and obtain any needed additional coverage, endorsements, or riders to protect themselves as they see fit. If you’d like some assistance making sense of it all, want to review your current policy, or just want a quote for coverage, the brokers and CSRS at DPM Insurance Group are always available to assist you. Click here to find the location nearest you: https://dpmins.com/locations/


Source: Insurancehotline


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24 Marlborough St. N., Box 479
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Phone: 519-676-8159
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Phone: 519-627-1777

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