Home insurance is something that everyone hopes they’ll never have to use, but in the unfortunate event that you do need to make a claim, it’s important to know the facts.
Unfortunately, there are countless myths about home insurance claims that can cause confusion.
In this blog post, we’ll dissect some of the most common myths and set the record straight so that you’re better informed and confident in your coverage.
For any other misconceptions you might have, reach out to your trusted insurance broker – Sharp Insurance.
Myths About Home Insurance Claims
Myth 1: Filing a home insurance claim will raise your premium.
It’s a common misconception that filing a home insurance claim will automatically raise your premium. While this can happen in some cases, it’s not always the case. If the claim is small, or you have a history of being a loyal customer, you might not see any rate increase at all. Even if you do see a rate increase, it might only be for a specific period of time and not permanent.
Myth 2: It’s easy to assess the value of your personal belongings.
While you might think you know the value of your personal belongings, it can be difficult to assign a proper value to them, especially if they are not commonly sold or easily identifiable. Make sure you take an inventory of all your belongings and keep a record of their value, including receipts or appraisals if possible.
Myth 3: Natural disasters are covered by all home insurance policies.
Many homeowners think that all home insurance policies cover natural disasters, but this is not always the case. Depending on where you live, you might need to specifically add an endorsement or separate coverage to protect you against earthquakes, floods, or hurricanes.
Myth 4: Home insurance covers everything in your home.
While home insurance covers a lot, it doesn’t cover items like expensive jewelry, fine artwork, or collectibles might need additional coverage to get the protection you need. Be sure to check with your agent or insurer to see if you have the appropriate coverage for these valuable items.
Myth 5: Your home insurance policy covers you while you’re away from home.
While your home insurance policy does cover your personal belongings, there are limits to where they are covered. If you’re traveling with valuable items, or storing them in a different location (e.g., a storage facility), you might need separate coverage to protect them against damage or theft. Be sure to review your policy and understand the limits of your coverage to avoid any unpleasant surprises later.
Myth 6: Home insurance does not typically cover damage caused by pests, rats, raccoons, and mold infestations.
Exceptions may apply if the initial damage is caused by a covered peril. For instance, if mold forms due to a burst pipe, there might be coverage. Some insurance policies offer a mold endorsement for an additional cost. It is important to review your policy and consult with your advisor or broker to confirm coverage for such damage.
Myth 7: Home insurance does not cover general home maintenance expenses.
However, you can purchase a separate home warranty to cover the replacement of certain appliances and structures from regular wear and tear. Otherwise, you will handle the costs of upkeep and maintenance.
Myth 8: Filing a single insurance claim does not necessarily raise your premiums, although multiple claims might.
Before filing a claim, it is advisable to estimate the repair costs. If the amount is close to your deductible, it might be more cost-effective to pay for it out of pocket instead claiming it.
Myth 9: Flood insurance isn’t exclusively for individuals residing in flood-prone areas.
The possibility of flooding exists everywhere, even if you don’t reside in a designated flood zone. In high-risk flood areas, both businesses and residences with government-backed mortgage lenders must possess flood insurance as a mandatory requirement. However, even if you’re not obligated to have flood insurance, it’s crucial to recognize that it may still be necessary.
It’s worth noting that approximately 20% of flood insurance claims originate from properties situated outside high-risk flood zones. This signifies that one in every five flood insurance claims comes from individuals who had they believed this misconception, might not have acquired flood insurance coverage!
Home insurance can be complicated, which is why it’s essential to understand the facts and avoid common myths and misconceptions. Remember to review your policy regularly and speak with your agent if you have any query about your coverage. Stay informed and stay protected.
Nyra handles business research, writing financial documents, news items, articles, and study materials about finances.