Disasters, whether natural or caused by human error, can happen in a blink of an eye. And that’s why it’s essential for homeowners to protect their homes and belongings with the right insurance policies.
While home insurance coverage is not a prerequisite to owning a home unless you’re buying one on a mortgage, you should seriously consider purchasing a policy – if you haven’t yet. You’ll sleep better at night knowing that you’re covered, should disaster strike.
But as with other insurance policies, there are plenty of speculations and misconceptions surrounding home insurance that you have to be aware of before you go and shop around for one. Knowing and understanding the facts will help you make sounder and more informed decisions when choosing a homeowners insurance policy.
Here are some of the home insurance myths that you should ignore.
Standard home insurance also protects you from flooding disasters.
Your home insurance may include some level of coverage for water damage, but flooding disaster is not one of them. In fact, flooding is a peril generally excluded in homeowner’s policies.
Should you feel the need to protect your home and your belongings from flood damage, your best bet would be a specialty flood insurance from the National Flood Insurance Program or NFIP.
Getting coverage for flood damage is crucial if your home is located in a flood-risk area, and it’s for your best interests to do so. Besides, your lender will probably require this of you.
If you have a home-based business, it’s also covered.
Many people who are working or operating a business from home assume that their homeowners insurance coverage also extends to business operating supplies and equipment in case of loss or damage. Well, this is definitely NOT the case.
If you have a home-based job or business, purchase a BOP or business insurance policy to make sure that your venture has the protection it needs.
Your insurance covers all injuries and accidents that take place within the property.
While your policy does come with liability coverage, it has its limitations. For one, accidents and injuries are only covered when they happen to other people.
If you or your family members get hurt at home, you’ll have to use your health insurance coverage for the treatment and or surgery or pay for it out-of-pocket. Your liability coverage, however, may protect you in case you cause damage to another person’s property.
When you have home insurance, all your belongings are protected.
Homeowners insurance policies cover personal property to some extent, but this does not mean that everything you own is covered. There are limits to your coverage; generally, only the items specified in the policy or within the coverage amount are accounted for.
Insurance companies put a cap on how much property coverage you can have, especially if you plenty of jewelry and valuable art pieces. If you have many precious belongings to protect, consider purchasing additional insurance for these items.
Older homes are cheaper to insure.
This myth could not be farther from the truth because home insurance for older homes is relatively more expensive than newer ones. Why so?
Homes that were built 20 years ago or so tend to use more complicated building techniques and incorporate more intricate details into their structure. An insurance company may even refuse to cover an old home if they think it would cost too much to repair.
When insurers calculate your premiums, they look at what features your home has and what materials are used to build it. They will factor in replacement and repair costs, as well as other additional coverages that you may want to include.
All that being said, any homeowner who wishes to get a competitive home insurance premium rate is advised to shop around, talk to several insurance providers, and compare the value of their offerings before making the pick.