Top Home Insurance Myths That Must Be Debunked in 2024

15 Home Insurance Myths to Watch Out For

The home is a prized possession for every owner. After years of hardwork and planning, a person is able to finance a home in today’s economy. Thus, this invaluable asset deserves  extra protection and care, something that is made possible through homeowners insurance policies. Almost every homeowner understands the significance of a home insurance plan, but many remain perplexed and confused. In all honesty, the home insurance domain is rife with myths and misconceptions, and hence, identifying the truth can be a challenge. But, what exactly is fact and what is fiction? This is precisely what we will be unraveling in this blog!

 

What is a Home Insurance Policy?

Before delving into the multiple home insurance myths, let us understand what the policy is all about. Simply put, a homeowners insurance plan can be defined as a contract between you and an insurance company wherein the latter provides compensation for repairs to and replacement for your home in exchange for a premium.

However, the refurbishing is applicable only when your abode is obliterated by a peril ‘covered’ by the home insurance policy, such as fire, hailstorm, vandalism, etc. In addition, homeowners insurance also includes liability coverage against accidents that occur in your home or on the property.

Also read: Does Homeowners’ Insurance Covers Home Business?

Likewise, it also covers the living costs when you are not able to live in your home during the rebuilding process.

Some of the pertinent benefits of a homeowners insurance policy include –

  • Protection of the main structure
  • Protection of detached structures
  • Affordability
  • Protection against natural disasters
  • Protection from lawsuits
  • Liability coverage
  • Coverage of extra living expenses and more

 

Top Home Insurance Myths That Must Be Debunked in 2024

  1. Home Insurance Will Break Your Bank

The first myth surrounding homeowners insurance is that it is super expensive and will burn a hole in your pocket. But, the truth is that no homeowner has to break their bank to safeguard their abode with insurance. Currently, the average cost of homeowners insurance in the USA is USD 1678 per year for USD 250000 dwelling coverage.

But, the premium you pay depends on a range of variables, such as your ZIP code, the construction of your home, age of your home, and more. But, one also needs to acknowledge that since 2022, the cost of home insurance is rising faster than inflation. But, by shopping around and understanding your unique needs and requirements, it is possible to find a quality home insurance plant that fits your budget.

 

  1. Home Insurance is Mandated by Law

A home insurance policy is beneficial but it is not mandated by law. One of the most common home insurance myths is that a homeowner is legally required to purchase. But, currently, no states in the USA require homeowners to enroll in an insurance plan. But, you may be required by your mortgage lender to carry home insurance to secure the financing.

 

  1. Renters are Covered by the Landlord’s Home Insurance

To the untrained eye it might seem pretty obvious that the belongings in your rented space are covered by your landlord’s insurance. But, unfortunately, the landlord’s insurance is only for their benefit and will hardly cater to you during tough times.

Read Also: Homeowners Insurance Doesn’t Cover These 6 Things

In such a context, renters insurance comes to the rescue. It is an excellent way to protect oneself and their belongings from liability exposure and damage due to covered perils.

 

  1. A Home Insurance Plan Covers All Your Belongings

A Home insurance policy covers quite a lot of the contents inside your home, but certain items need special appraisals. But, unfortunately, a lot of homeowners wrongfully assure that their home insurance covers all their personal belongings. In fact, every home insurance plan has a limit to what is covered.

So, it is essential to discuss coverage with your insurance provider and also provide them with a loss of your possessions to see which are the things needing special coverage. Jewelry and items with sentimental value must be evaluated by an appraiser. Likewise, if you have a lot of valuables like jewelry, expensive coins, antique items, etc, which exceed your coverage limit, it is best to consider additional personal property insurance.

 

  1. Home Insurance Covers All Natural Disasters

Home insurance policies do not cover all natural disasters automatically. Homeowners usually need to buy separate coverage for specific anticipated disasters. For instance, earthquakes are not a covered peril of home insurance. So, if you live in an earthquake-prone zone, it is best to opt for additional coverage.

Moreover, despite the fact that 99 percent of counties in the USA are susceptible to flood-related damage, flooding is not a covered peril in home insurance plans. So, you have to buy additional coverage.

 

  1. Renovations Do Not Impact Home Insurance

Yes, you heard it right, your home insurance is probably affected by any renovation work you indulge in and the scope and size of the project. For instance, painting one of your home’s walls probably will not impact your insurance in any way. But, major refurbishments, such as changing the roof, adding a porch, etc, will affect the coverage. So, the safest solution is to check with your insurance provider before starting any project so that you know what is covered and what is not.

 

  1. Your Home Is Covered While You Are on Vacation

Your home is covered while you are away enjoying a vacation only if you take adequate measures to prevent disasters such as pipe leaks, fires, and artificial flooding. So, it is crucial to turn off the water taps, ensure that your home’s heating is optimal, etc.

 

  1. Pest and Mold Infestations are Covered in a Home Insurance Plan

Last but not least, a looming home insurance myth is that pest and mold infestation are ‘covered’ perils under a homeowners insurance plan. However, most policies do not cover damage caused by pests, racoons, rats and mold. In many cases, insurance only covers them if a ‘covered’ peril causes the mold or pest infestation.

Also read: When Can You Claim for Water Damage Coverages on Home Insurance

For instance, mold infestation caused by an artificial pipe leak might be covered. However, if the mold infestation was caused because you live in a wet climate, the risk is not covered. You can opt for additional mold and pest endorsements in your home insurance.

 

Conclusion

So, there we have it, the top 8 home insurance myths that need to be debunked in 2024.