Home insurance is not something new that has come up. It has been there since quite some time but the awareness and transparency has been lacking among the customers. While some opt for it for monetary compensations attached to that seems like a good deal, whereas some just look at it as not a lucrative option and hence let it go. Everything has pros and cons attached to it, but before taking a decision one should always try to understand the entire deal in detail and only then take a wise decision. Similar is the case of home insurance. If understood clearly, and the ground check is done robustly, one can actually have a secure future for their property and for themselves as well. Once should be clear about every single clause mentioned in the legal agreement of the home insurance document.
Home insurance is also commonly referred to as homeowner’s insurance, which actually means a property insurance that covers one’s private residence/property. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. Understanding the world of insurance can be difficult and hence any decision with regards to this, should be well thought over. Home insurance myths can be very costly, resulting in homeowners not having the right coverage or overpaying for their policy.
Home insurance policies are written in dense legal format, and not all customers fully understand the document word by word. As a result, many people are mistaken about their rights when dealing with insurance companies and are unaware of gaps in their coverage, some of which could cause financial ruin.
Currently, there are many home insurance myths and misconceptions that need to be addressed to mitigate the hardships of the insured/customers. As a homeowner, one should always be abreast with all the information and options available in the market (from different insurance companies) that gives them the best coverage for their property. In order to be properly insured, you need to be well informed. So here we are debunking 5 major home insurance myths that will surely help you take a sound decision about your home insurance plans in the future.
Coverage against natural disasters:
The home insurance policy does not cover losses caused by natural disasters such as, flood, earthquake, etc. If the owner wishes to have protection/coverage against these natural disasters, they will have to go for a separate policy such as flood insurance policy, or it can be added as an endorsement on your existing policy.
Some nature and weather related damage such as, wind, lightning, and hail damage is covered on a home insurance policy, but not everything is covered. It’s important to read all of the covered perils and the exclusions in order to be aware of what is covered in your insurance policy.
In-home injuries are covered:
In case you were thinking on similar lines, sadly you are wrong. The liability portion of a standard home insurance policy covers the medical expenses of guests who are injured on your property, but not you or any of your family members.
Insuring home at value price:
The insurance cost of your home is not based on the current real estate value of your property. Rather, it depends on how much would it cost to rebuild and replace it.
This factor is particularly important if your home is at a prime location, where the value of your property will only keep rising.
Premium goes up with every claim filed:
A single claim may not result in a premium increase. However, filing multiple claims may increase your premium. Always make an estimate cost of repairs before filing a claim. If the cost isn’t much higher than your deductible, then it is more reasonable to pay for it yourself, rather than filing a claim.
Older homes are cheaper to insure:
When determining what it will cost to fix or replace your home, the insurance provider will evaluate several factors, including the location of your home and the materials used to build it. It is always advisable to first take quotes from different insurance companies and then tally the pros and cons of all the quotations.
As already mentioned in point #3, insurance value depends not on the market value of the property, rather the price to rebuild it. Hence, going by this logic, there is possibility that older homes will have construction techniques that tend to be more expensive to replace than what you see in modern-day construction. Some insurance companies may even refuse to cover an older home if it seems too costly to repair.
Want to know more after reading these myths? Call your agent. They’ll be happy to walk you through your policy so that you understand the nitty-gritties. It is your responsibility to understand it all!
Myths regarding insurance are pervasive, and home insurance is no different. It is important to be well informed about the various home insurance policies present in the market, and then studying all the options in detail and chalking out the pros and cons for each of them. Look for exclusions to coverage and decide how you will cover those risks. One should also learn all the facts about home insurance to avoid major mistakes that many homeowners make.
Buying a home is a big investment for everybody, and with the correct home insurance policy one can protect that investment. Since you’ve likely spent ample time finding and maintaining your home, what could be more important than protecting your largest investment!