There are many myths surrounding homeowner’s insurance, and belief in these myths have caused many homeowners to find themselves either underinsured or completely without coverage in the event of a claim. The best way to determine what is covered by your homeowner’s insurance policy is to review it carefully and check with your agent to make sure your homeowner’s policy covers your specific needs. You can’t rely on myths to make sure you are insured properly.
Myth 1. If someone is injured on my property while trespassing, I can’t be held liable.
You can be held liable for anyone who is injured on your property regardless of whether they were or invited.
Myth 2. Homeowners insurance covers upkeep and maintenance of my home.
Homeowner’s insurance is not a maintenance contract for your home. Insurance is intended for sudden and accidental losses and your claim can be denied if failure to maintain your home leads to a loss.
Myth 3. My home-based business is covered under my homeowner’s insurance.
While it is true that there may be some coverage for your business property, it is very limited. You may need to purchase an endorsement to be properly covered.
Myth 4. My homeowner’s insurance covers my medical expenses if I am injured at home.
The medical expense portion of your homeowner’s insurance covers others who are injured on your property, not the insured or family members residing in the home.
Myth 5. My homeowner’s insurance company can’t cancel my policy as long as I pay my premiums.
There are several reasons that an insurance company can legally cancel your policy, and non-payment of premium is only one of them. Your policy can also be cancelled for misrepresentation or failure to disclose facts relating to past claims. Claims frequency could also lead to your policy being cancelled or non-renewed.
Myth 6. If my neighbor’s tree falls on my house, they are legally responsible.
Unless you have given your neighbor written notice in advance that the tree is a hazard and at risk of falling onto your property, they can’t be held responsible. Your homeowner’s insurance will cover removal and disposal of the tree as long as it fell on covered property or is blocking access to the home, but your deductible will apply.
Myth 7. My homeowners insurance covers flood damage.
Homeowner’s insurance policies specifically exclude damage caused by flood and earthquakes. To obtain coverage, you will need to purchase a separate policy.
Myth 8. I don’t need to notify my insurance company if I build an addition to my home. A standard homeowner’s insurance policy requires that your home is insured to its full replacement value. Therefore, you need to notify your insurance company of anything that increases the value of your home.
Myth 9. Anyone who lives in my home is covered under my homeowner’s insurance.
Only those persons listed on the declarations page as named insured’s are covered, along with their minor children.
Myth 10. If my pet raccoon bites a visitor to my home, my homeowner’s insurance will cover it if I’m sued.
Liability from exotic animals is specifically excluded on your homeowner’s insurance policy. This would include any animal not traditionally domesticated as house pets.