6 Myths and Facts About Your Homeowners Premium

6 Myths and Facts About Your Homeowners Premium

Buying homeowners insurance seems like it should be a straightforward process. You have a house that you want to make sure is safe during any emergency (like a robbery, fire, hurricane or other natural disasters), so you buy homeowners insurance for peace of mind. Unfortunately, the real process of acquiring the right plan for your home is a little bit more complex than most people think. Let’s look at some myths associated with homeowner’s insurance and separate fact from fiction.


Myth 1: Homeowners Insurance Covers ALL of Your Valuables

It is true that homeowner’s insurance will cover valuables, like jewelry and collectibles, up to a certain dollar amount. However, if something happens that exceeds that amount, you won’t get any extra coverage to make up those losses.


Fact: You need the adequate amount of coverage to cover all of your belongings, not just the value of your home.


Myth 2: Flood Coverage is Common in Typical Insurance Plans

For the most part, a regular homeowner’s insurance policy does not cover flood damage. If you live in an area with frequent inclement weather, flood insurance may be much more expensive or relegated to an entirely different policy. For the record, floods can be caused by much more than rain. You can see flooding in areas impacted by melting snow, hurricanes, and more.


Fact: Most standard policies do cover flood damage because of burst or frozen pipes.


Myth 3: Insure Your Home for the Market Value Only

It’s a good idea to insure your home for the amount of money that it would cost to rebuild if it were completely destroyed. However, the market value attached to your home will also include the price of land, which will not need coverage from insurance.


Fact: Paying for the total market value will result in a much higher premium than you necessarily need to have.


Myth 4: Municipal Water is Covered by the City

In most parts of the country, any water main that connects to your home from the water system isn’t necessarily covered by regular homeowner’s insurance. If a pipe or section fails for some reason and it falls on your property, it is usually your responsibility to take care of the repair.


Fact: Some providers may offer an endorsement policy to cover the water main attached to your home, and some home warranties will provide some amount of coverage in the case of a ruptured water main.


Myth 5: Compare a Few Big-Name Insurers to Get a Competitive Premium

Many consumers don’t shop around enough for their homeowner’s insurance. Instead, they think it’s fine to compare quotes among a few respected insurance companies and call it good. But depending on your area and coverage details, that won’t always get you the most affordable rate for the coverage you need.


Fact: Explore the Entire Market

The ability to quickly compare price offerings based on your personal needs is one of the internet’s shining conveniences. And insurance is no different. What once required individual calls — and more recently emails — to multiple independent agents to get multiple quotes is now achievable through homeowners insurance comparison platforms like CoverHound. If you know the coverages you want, you can take care of everything without even getting on the phone. Open a few browsers and compare away.


Myth 6: All Your Investment Property Needs is Homeowners Insurance

If you own an investment property that you are using as a rental, you’ll need to make sure that you have a specific type of policy that covers you as a landlord. If you own a vacant property, you’ll likely need to obtain what’s known as a ‘vacant home policy.’


Fact: If you don’t have the correct type of coverage on a property that you own and attempt to file a claim, your insurer may just drop you completely. This scenario is something you want to avoid at all costs, as the time to lose insurance coverage is not during or after an emergency.


If you aren’t sure about your coverage, speak with your provider about what is and isn’t covered. Make sure that you have all the information needed to give you and your family a much-needed peace of mind.

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