Navigating Your Insurance: 6 Common Home Insurance Coverage Misconceptions

by | Dec 17, 2021 | Insurance

Homeowners’ Insurance Policy
Your home is your most valuable investment. You have house insurance to safeguard your investment. However, do you completely comprehend your insurance coverage? Insurance plans are sometimes unclear or difficult to understand, and this is done on purpose. Today, we’re addressing some common misconceptions regarding house insurance.

Myth 1: If I can’t understand the legal jargon and confusing language in my homeowner’s insurance policy, why bother reading it?
Insurance plans must contain some legalese. However, many jurisdictions’ laws prohibit excessive legalese in-house insurance policies.

Assume your home insurance policy has terminology that is confusing, vague, or difficult for “a person of ordinary intellect” to grasp. In that instance, you may be able to sue your insurance in court. Furthermore, unclear wording in an insurance policy that is taken to court in some states will be determined in favor of the policyholder. In the circumstances like these, courts will rule in favor of the homeowner. As a result, it is in your insurance company’s best interest to ensure that you comprehend every word of your policy.

Myth 2: Older homes have lower insurance costs.
Some individuals who purchase older properties mistakenly believe that they would be less expensive to insure.

The truth is that older homes may rely on unique construction processes, obsolete products, and other factors that are difficult for current homeowners to replicate, restore, or reconstruct.

So, if a flood destroys a portion of your ceiling and flooring, fixing it in an older home may be substantially more expensive than just replacing it totally in a new home.

Crown molding, hardwood flooring, plaster, stained glass, and other features of older homes might raise your insurance premiums. Consult with your insurance company to assess the cost of repairing or replacing your house. Obtain many quotations. Typically, older properties are not as inexpensive as you may believe.

Aaraya Claims Couple Homeowners Insurance Policy

Myth 3: Your homeowner’s insurance policy covers everything in your house.
A terrible fire destroys your house. You’re saddened, but you say to yourself, “Well, at least my insurance policy covers everything.”

Unfortunately, this is not always the case. Insurance coverage might not always cover everything in your home. Some insurers, for example, impose coverage restrictions on certain assets, such as jewels or rare objects. If you own a large number of these things, your insurer may need you to pay an endorsement, or add-on, to cover them.

Speak with your insurance right away to ensure that everything in your house is protected in the case of a loss.

Myth #4: You should insure your home for its full market value.
This is where things may become complicated. You may believe that insuring your property for its market value is a good idea. But, in truth, the best choice is to insure your home for the expense of rebuilding and replacing it.

This is especially true if you reside in a city or region where housing prices are rapidly rising.

Why is this a significant distinction? Though you insure your property for market value, you’ll have to pay a premium on your insurance policy even if it wouldn’t cost that much to repair or rebuild.

On the other hand, if you reside in a depressed housing market, it may cost significantly more to rebuild your home than it is worth if you try to sell it. Speak with your insurance carrier to determine how much it would cost to replace your house in the event of a total loss.

Myth 5: Personal injuries sustained at home are covered by insurance.
It’s easy to understand why this notion endures. Some individuals feel that if they are harmed at home, their house insurance coverage will compensate them if they are harmed at home.

Unfortunately, this is not always the case. Consult your health insurance provider about how to cover your own personal medical expenses. Your homeowners’ insurance policy does have a liability section, but it is only intended to cover responsibility for visitors hurt on your property. It does not apply to you or your family.

If you have a lot of careless friends who are regularly hurt on your property, look into “no-fault” medical coverage on your house insurance policy. This no-fault insurance covers your visitors’ expenditures without drawing on your liability coverage. If there are just two or three incidences, it will pay for itself.

Myth 6: It’s totally fine for everyone to overstate their losses.
You could be tempted to exaggerate your losses if you believe, “Hey, I’m simply getting my money’s worth out of my insurance coverage.” After all, it’s something that everyone does, right?

The fact is that you’re far better off being honest from the start. If your insurance has even a smidgeon of evidence that you’re inflating your claims, every subsequent claim will be scrutinized. One act of dishonesty today might jeopardize your relationship with your insurance.

It might potentially constitute fraud in more extreme circumstances.

So, if your 42-inch TV seemed to be a 60-inch TV from a specific angle, and you’ve always wanted a new 60-inch TV anyway, you might definitely reconsider. Insurers have decades of expertise dealing with incidents like these.