Many homeowners are not entirely sure what a homeowner’s insurance covers. In fact, there are myths and rumors that surround how an insurance policy functions and what we could all really get from it. Because of this, people are wary of this added expense. Some may even think that it is not worth it! Thus, it is critical that we discuss what home insurance could provide you, and what it could not.
Read on as we debunk some of the most common myths about home insurance.
Myth: Homeowners Insurance Is Legally Required
Contrary to popular belief, neither state nor federal law requires homeowners insurance. If you already have a mortgage, you may be needed to secure another one. To safeguard their financial interest in the property, the majority of lenders need homeowners insurance.
Myth: Flood Is Covered by Home Insurance
Many homeowners mistakenly feel that their flood insurance covers them. Their insurance policy covers water damage, and what is a flood, if not a lot of water? However, when it comes to insurance, “water damage” often refers to damage caused by a broken refrigerator or a burst pipe.
Myth: Home Insurance Protects You from Theft
Your homeowner’s insurance policy does offer some coverage for stolen property. Your personal property coverage limit is normally between 20% and 50% of your housing coverage.
Luxury items may be subject to extra exclusions. Many insurance companies have higher limitations for high-value items, which often do not cover the loss.
Myth: Lower Coverage Mean Reduced Rates
Most consumers feel that the only way to save money on home insurance is to reduce coverage. This could be because several of the criteria affect your premium, such as location, age of the home, size of the home, and cost of replacement and repairs.
Many insurance companies, however, give discounts to homeowners who exercise prudence. You can also increase your deductible. This raises the expense of your claim, but insurance companies usually compensate you with a cheaper rate.
Myth: Home Insurance Is More Expensive than DIY Insurance
Self-insurance is simply a DIY cost-cutting measure as compared to acquiring a home insurance policy. This option may appeal to building professionals. You may be able to make some repairs, but you will not be able to entirely rebuild your home.
Myth: Home Insurance Raises Your Home’s Market Value
In case you didn’t know, market value and replacement value rarely coincide. At its present market value, it would be overinsured.
Myth: Home Insurance Covers Pest Infestations
Termites, mice, bats, and other pests rarely cause structural damage. It expects you to exterminate bugs before they cause harm to your house as an insurer.
Because our homes are the biggest investments in our lives, we should learn how to protect them. A great way to do this is to settle on a home insurance policy that protects not only your property but also the structure and your belongings. This way, you can secure a happy home life while feeling safe inside your home. In due time, you will see how a tailor-fit home insurance policy could benefit you and your loved ones.
Are you in need of the best home insurance in Colorado? 5280 Insurance is here to guide you through protecting your assets. Give us a call today to learn more!