Homeowners insurance blog

Top 5 Homeowners Insurance Myths

Myth #1- If my home is damaged by a flood my homeowners insurance will cover the damages.

The facts: Flood coverage is provided under a separate flood insurance policy and is not included under a standard home insurance policy. If your home is damaged by flood waters you will not be reimbursed for your damages unless you hold a flood insurance policy on the property.

Myth #2- If I keep my deductible really high I will save a lot of money.

The facts: While a high deductible can lower your monthly premium, it can also cost you a lot of money out-of-pocket if you were to file a claim on your home insurance policy. Your best bet is to keep your deductible as high as possible while keeping your financial situation comfortable if you were to sustain a loss at any time.

Myth #3- Since my policy covers theft, all of my jewelry is protected under my homeowners policy.

The facts: A standard home insurance policy does protect you from theft, however, as with many other items of high value jewelry carries certain limits with it. For example, your policy may only cover up to $1500 for total loss of jewelry in a covered claim. In that scenario, if your jewelry was valued at $2400, you would not be compensated for the additional $900. Check your policy limits and schedule an endorsement (rider) on your policy to cover any particular high-value items.

Myth #4- If my neighbor’s tree falls on my house, their policy will pay for my damages.

The facts: A good way to remember this one is, “Your house, your policy”. Even if it was your neighbor’s tree that fell due to a wind storm, for example, you would have to file a claim on your own homeowners insurance policy to cover the damages.

Myth #5- My home insurance dwelling coverage should be equal to the value of my home when I purchased it.

The facts: The dwelling coverage on your policy should be enough to replace your home to it’s current condition in the event of a total loss. This will typically be less than your home’s market value since replacement value does not include the price of the land. Dwelling coverage is calculated by multiplying local building costs by the square footage of your home. Use our homeowners insurance calculator to determine your approximate dwelling coverage.