Home insurance is a big market, and so is the topic. Complicated is an understatement when referring to how home insurance feels like. Not all people have an understanding of how things work, and some have decided to believe some things and without any facts, share their opinions with others. As a result, there are many myths and misconceptions surrounding home insurance. It could be because you don’t confirm from your insurance providers or read from relevant sources, but inaccurate myths will mislead you. Here are ten of those myths you should never believe at all. When looking at types of insurance it is also important to consider life insurance as well.
1. You Must Have Home Insurance
Yes, you must have auto insurance. AUTO, not HOME! The government hasn’t made home insurance mandatory, and if they do, be sure you will hear it on the news. Some institutions, however, might require you to have it. For instance, if you have a mortgage on your property, your bank or lender will want you to have an active home insurance policy and name them there.
2. Home Insurance is a Waste of Money
No insurance is a waste of money unless there is nothing to insure. Life is a risk itself and so is your house. Home insurance will help protect your property and everything inside it.
Consider what it would cost you to rebuild your house which you acquired after saving up for years. It would be expensive. That’s why you should get an online home insurance quote as soon as possible.
3. Medical Expenses are Covered
Comprehensive auto insurance covers the passengers and not the driver. It’s the same case for a homeowner. The homeowner insurance covers the medical expenses for the guests in case of a disaster, but not the homeowner.
However, if your family gets injured, you will have to cater to them with your health insurance plan.
4. You Will Receive “Full Coverage” After Buying Homeowners Insurance
Yes, if you buy umbrella insurance, but you will not get full coverage in other way. There are several forms of home insurance namely:
- Basic Form
- Broad Form
- Special Form
- Tenants Form
- Condominium Unit-Owners Form
- Modified Coverage Form
- Comprehensive Form
The most common is the special form since it provides the most substantial coverage.
5. Your Home Business is Covered as Well
Sixty-one percent of home businesses in the US are not insured according to research, and it could be because most homeowners assume, they are insured by home insurance.
You have to buy a separate insurance policy for your business, and it’s in fact very easy.
6. Your Insurance Protects You Against Flooding
It depends on your insurance policy. Most insurance policies protect you against accidents like pipe bursts, but not flooding.
So, if a river breaks its banks and the water flows overland to your house, then you got to figure that out.
7. Insure Your Home for Its Market Value
Wrong! Insure your house for its replacement costs. Take all the expenses that you would incur in rebuilding your home such as the building materials, and construction costs.
Home insurance rates are based on rebuilding costs.
8. Premium is Increased Every Time a Claim is Made
Normally, if you submit a single claim will not make your insurer increase your premium, but if you file multiple, they might! Get an estimate of the total cost of repairs and if the damages are not too costly, pay for them yourself to avoid the premium increase.
9. They Will Cover Your Car’s Damage
It’s a lie! Your car insurance takes care of the damage, and not the things inside it. The homeowner policy’s personal property coverage will take care of them.
10. Insurance is Cheaper for Less Expensive and Older Homes
On the contrary, insurance is more expensive for older houses since there are higher possibilities of them getting damaged. It’s more costly for the insurer to repair such a house.
Well, there you have it. The ten most common myths have been rolled over to facts. Most importantly, you should do your research, call different house insurers and get their quotes, ask what is covered and what is not before making a decision. Above all, don’t believe everything you are told. Some are pure misconceptions.