Homeowners, Were You Aware of These Myths About Homeowners Insurance?

concept of myths

With every insurance policy, there are myths and misconceptions that can end up hindering homeowners from purchasing the right coverage. While there are many misconceptions out there that seem plausible and convincing, it’s important to separate fact from fiction. To help you better understand coverage, take a look at the truth behind these common homeowners insurance myths.

Homeowners insurance is a waste of money.

In most cases, having homeowners is nonnegotiable. It may be required by your lender if you have a mortgage, which helps to protect their investment in the property. Although you may think that having home insurance is pointless, it is far from. It is designed to protect your property from disasters as well as your pocket from liability issues. It is a valuable resource to fall back on when the worst happens. If your home gets damaged by a fire, there’s a break-in, you’re sued by a guest who slipped and fell, or you need to live elsewhere while your home is being repaired – home insurance can help. For most homeowners, they could not afford to be without this coverage.

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.

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 to determine how much coverage you need for your personal property.

We hope that this information helps you understand homeowners insurance. When you’re looking to protect your property, contact your insurance professionals at American Premier Insurance. Our dedicated experts are ready to assist you with all your home insurance needs in Phoenix, Tucson, and beyond.