Most homeowners know what their homeowners insurance covers and when they can file a claim. Or do they? Surprisingly few homeowners actually take the time to read through their policy and review it regularly. This results in disappointment and financial hardship when they try to file a claim for something that is not covered in their policy. Take a look at these homeowners insurance myths and the truth behind them.
Common Misconceptions About Homeowners Insurance
1. Earthquakes are covered by standard homeowners insurance
This is a common myth among homeowners as they know that natural disasters are covered, which means earthquakes are, too. However, in most standard home insurance policies, earthquake coverage is excluded. This is because it is considered a mass-destruction event and, therefore, requires its own policy. If you want earthquake insurance coverage, you must purchase a separate policy. Since earthquakes are not an uncommon occurrence across California, it is well worth securing this valuable policy before the ground shakes. It will help to recover your home and belongings when damaged by an earthquake.
2. If my home is destroyed, my insurance will cover its current market value
Let’s say your home was destroyed in a fire. If the property was worth $500,000 at the time, you might assume that’s how much the insurance company will pay you when you file a claim. However, insurance is tied to the cost to rebuild the home – not its market value. That could result in a rude awakening at a time when you are already stressed. Rebuilding costs continue to rise because of labor and raw materials on the increase. If you live in an older home, it will need to be reconstructed according to current building costs, which could end up driving expenses up even further.
Call your insurance provider to ensure that you have enough coverage to fully rebuild the property. Any premium increases will be minor, but they will make a huge difference in the event of a catastrophe.
3. All of my belongings are covered by my insurance
Again, this is a common myth of believing there is more coverage than there is. While standard insurance policies do cover your personal belongings, such as clothing, electronics, and furniture, they have a limit. If you have items that exceed your coverage limits, you will need to add on a rider to protect the rest of your belongings. For example, if you have high-value items such as jewelry, antiques, art, and musical equipment, you may need additional coverage.
Contact your insurer to ensure you have coverage that insures your items to their full value. Conduct a home inventory that determines how much coverage you need for your personal property.
There are many myths surrounding homeowners insurance, and it’s essential that you know the truth so that you purchase the right coverage and keep your beloved items and home protected. Working with a qualified insurance agent can help you secure coverage and keep it in line with your changing needs throughout the year. The right agent will be able to assess your property and belongings and tailor coverage so that you are only paying for what you need and want. Remember to keep in contact with your insurer so that your homeowners insurance meets your demands even when life changes.
Finding affordable homeowners insurance doesn’t have to be difficult – no matter your location. The team at Action Insurance Group are here to help. We serve residents in WA, OR, CA, ID, and UT – Contact us today to get started.
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