Assuming what is covered under your homeowner’s insurance can prove to be disastrous. Insurance policies are designed to be complex, with specific limits and coverages outlined using carefully chosen words. There are several myths surrounding homeowner’s insurance, causing many homeowners to find themselves in trouble when trying to get reimbursed for claims.
My homeowner’s insurance will cover maintenance or normal wear and tear
This is a common mistake by homeowners. A lot of people confuse insurance coverage with a maintenance contract. Insurance policies are meant to cover any damage or losses due to accidents or acts of nature. Damage due to wear and tear is the responsibility of the homeowner, and will not be covered by your insurance. It should also be noted, if the homeowner neglects to maintain their house, the insurance company could potentially deny their a claim.
If someone is injured while trespassing on my property, I will not be held liable.
Actually, you can be held liable for anyone who is injured on your property. Even if the person is trespassing.
My neighbor’s tree fell and damaged my house, don’t they have to pay for it?
These situations can result in ugly disputes with your neighbors, and unless you can prove negligence, this claim will have to go through your own insurance. Proving negligence can be pretty hard since it is up to the judge to determine what can be accepted as evidence in your defense. Occasionally, if you have a nice neighbor with a great insurance company, their insurance might pick up the tab. That being said, if you have any concerns about your neighbor’s overhanging trees, make sure to notify them in writing.
Flood damage is covered under my homeowner’s insurance
This is another common mistake by homeowners. Standard homeowner’s policies do not cover damage as the result of a flood. If you happen to live in a flood zone or near an area that is prone to heavy rain and rising waters (i.e. Florida), it is recommended that you purchase flood insurance through FEMA. When purchasing insurance, ask your agent if your home is at risk of flooding. Doing so can save you a lot of headache and money in the long run.
My insurance company can not cancel my policy as long as I pay the premiums on time.
Not true. While not paying your premium will certainly result in a canceled policy, there are several other reasons it could be canceled. Some examples would include giving incorrect or misleading information to the insurance company, failing to meet fire or building codes, neglecting to perform necessary repairs, and too many claims on your policy. Any of these would give the insurance company the right to cancel or non-renew your policy with proper notice.
If I run my business out of my house, it is covered under my homeowner’s insurance policy.
Just because you have a home-based business, doesn’t mean your homeowner’s insurance covers your business. Only some of your business property can be covered under regular homeowner’s insurance. Assuming everything is covered could leave you on the hook for a lot of money, should your business be affected by damage to your home. It is recommended you talk to your insurance agent about purchasing a home and business combination policy with professional liability coverage (if applicable).
If I am injured in my home, my medical expenses will be covered.
Medical expenses are only covered for non residence who are injured on your property. Homeowner’s insurance will not cover any expenses if you or any other residents are injured on your property.
If I experience a loss, my insurance company will pay me for everything I tell them I lost.
If you experience damage to your home, your insurance company adjuster is going to request that you make a list of everything that was damaged. This will need to include the date of purchase, purchase price, any receipts, photos prior to damage, and model numbers (among other things). As you could imagine, this is very hard to do from memory and will require a lot of research. Therefore, it is very important to create and maintain this list ahead of time and keep it in a fireproof safe. This will not only help you to receive a settlement faster, but the total settlement will more closely represent the actual cost of replacing those items.
My insurance company doesn’t require me to tell them if I am building an addition to my home.
Not true. In order to receive full reimbursement in the event of a loss, the insurance company must be notified of any alterations that increase your home’s value. If you do not notify your insurance company of these changes, you could end up underinsured and receive a reduced claim payment.
All jewelry, furs, and other valuables are fully covered under homeowner’s insurance
Insurance companies limit the coverage for valuables, usually only a few thousand dollars. If you have valuables worth more than that amount, it is recommended that you purchase additional coverage.
If you are worried that something might not be covered by your homeowner’s insurance, read over your policy and contact your agent to discuss your concerns. Putting off your questions could end up costing you a lot of money down the road. Also, if you have not already created a list of your contents, it would be wise to make one soon. This will save you a lot of headache and money, in the event of a loss. If you happen to experience a loss and your insurance company tells you it’s not covered, you should contact a public adjuster to see if anything was overlooked (which happens frequently).