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3 Common Home Insurance Myths

How much do you know about homeowner's insurance coverage? If you are like most people, you have a policy but aren't quite sure what it covers

Unfortunately, this lack of knowledge by the general public has caused some ugly misconceptions about insurance to spread -- myths that could cost you and your family a ton of money. Here are three myths about homeowner's insurance and their respective truths.

Myth #1: Your Homeowner's Policy Covers Your Home-Based Business

Do you run a business out of your home? Maybe you sell vitamins, makeup, jewelry, or something completely different through a marketing program. Perhaps you handcraft items to sell at festivals or offer services to clients who visit you at your residence. Either way, you might believe the myth that your homeowner's insurance covers your business endeavors.

This is a myth! Most homeowner's insurance policies specifically exclude home businesses. This means that if you have an inventory of product stolen or a client becomes injured at your residence, you may not be covered. This problem is pretty widespread, too. According to Independent Agents and Brokers of America, nearly sixty percent of home-based business owners do not have appropriate insurance coverage.

Thankfully, most insurance companies offer a rider for home businesses that is pretty affordable.

Myth #2: Earthquakes and Floods Are Covered

Another fallacy is that a homeowner's insurance policy will protect you against damage due to an earthquake, flood, or other natural phenomenon. The truth is that sadly many natural disasters are not covered under your standard policy. While some circumstances such as a hailstorm or a tornado are sporadic enough to warrant coverage, others that create widespread damage are not.

This is where having specialty flood or earthquake coverage comes into play. These are special policies that are underwritten by a private insurer and backed by the government to fully protect your home and belongings against any damage due to named perils. Purchasing one of these policies is usually quite affordable and only takes a phone call to your agent to start the process.

Myth #3: Your Insurance will Cover Everything in the Event of a Disaster

One more myth that many people seem to believe is that homeowner's insurance will cover everything you own in the event of a disaster. The truth to this myth is that having a policy only covers a portion of your belongings. Riders often need to be added to expand coverage for expensive electronics, guns, jewelry, and furs. If you own any of these items, it is worth talking to your agent about to ensure you have the coverage you need.

Do any of these scenarios apply to you? Of course, you are always free to make policy changes to adjust your coverage to suit your needs. For more information or to discuss your unique situation, please contact us today.

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