No one likes to find out that their home insurance does not actually cover them when they need to make a claim for a certain loss. Here are a few common misconceptions people have about home insurance so you can be sure to avoid them and design your policy according to your needs and main concerns.
1. Home insurance includes water damage
The answer here is yes and no; it depends on how the water damage occurred.
- Pipe bursting: If damage was accidentally caused by a pipe bursting, then this is usually included in a standard homeowner’s insurance policy.
- Sewage back-up: Coverage for damage caused by a sewer back-up into your basement is not usually covered unless you have specifically added this to your policy.
- Flooding: Until recently, there was no insurance available for what is called ‘overland flooding’ but now you can opt for overland flood insurance, especially if you live in an area prone to flooding.
2. My house is insured for its full value
Insuring your house for the price you paid for it will not provide sufficient funds to rebuild it if a fire destroys it five years from now. This is one reason why it is a good idea to review your insurance needs at least annually to see if you still have enough coverage. And over the years you may have upgraded or improved your home with an addition or other renovations, which increases its value. Again your policy may not reflect the current value of your home if you have not kept it up-to-date. The usual recommendation is to insure your home for its replacement value.
3. Home insurance covers everything in my home
It’s true that a standard homeowner’s policy provides coverage for your personal belongings but there are exceptions. Typical exclusions can be expensive items of jewelry, sports equipment, artwork, musical instruments, electronics and other high-value possessions. Be sure to ask your insurance professional about any expensive items in your home to see if your limits would cover them or not. And if you are running a business from your home, you may need special coverage for business assets.
4. Home insurance includes damage from natural disasters
Again the answer is yes and no depending on the disaster. Damage from high winds, hail or lightning is usually covered but damage due to earthquakes is rarely included without added coverage for ground movements. If you have any concerns about potential damage from certain natural events, you can always get a quote to find out how much the extra coverage would cost and decide if the additional peace of mind is worth it or not.
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No misconception here! Our licensed home insurance brokers would be happy to discuss any questions or concerns about your home insurance and provide no-obligation quotes. Call Mitch Insurance 1-800-731-2228 or email us at info@nullmitchinsurance.com.
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