Shunning Some Common Home Insurance Myths
However, these myths could very well be costing you. Homeowners are unable to obtain their desired coverage or end up paying more than what they should be. Therefore, it is imperative to debunk some home insurance myths, and in turn, shedding light on some facts:
Myth#1 – A Home Is Insured For Its Purchase Price
This is a myth; this is because the amount it costs to invest in a home is certainly not the same as the amount it would cost to rebuild it. There are a host of factors that play a vital role in determining that figure; some of which are the value of the land, its popularity, and demand of the neighborhood, among others. Moreover, the replacement value of the home is not inclusive of the land or the view, but merely the structure that rests over the property and its contents. Hence, the home should be insured according to its replacement cost, not its market value.
Myth#2 – Water Damage Is Covered Under Home Insurance
There are only certain forms of water damages that are covered under home insurance plans. Generally, the ‘sudden and accidental discharge of water’ is covered under home insurance policies such as damages caused by a ruptured pipe. Moreover, if you have an option in your insurance policy, you can gain coverage for a sewer back-up.
Myth#3 – Home Insurance Covers Upgrades
Whether your home’s roof is getting old and crooked or an old tree is dying and is at the verge of falling off, posing danger to your family, these upgrades will not be covered by your home insurance policy. This is simply because home insurance is not responsible for covering any wear and tear on the home to keep away from loss. It is there to return the home from a pre-loss condition or cover an unexpected mishap such as theft or fire. All in all, maintenance and upgrade is the homeowner’s responsibility, not the insurance company.
Myth#4 – Natural Disaster-Related Damages Are Everlastingly Covered
It is important to note that NOT EVERY natural disaster is covered under home insurance policies. For instance, damages caused by wind, lightning and hail are covered under insurance policies; earthquakes, however, are not. Ultimately, it all depends on the terms and conditions of the policy which vary from company to company. In order to cover all the natural disasters, additional coverage is usually required.
Just as important it is to be aware of these myths, it’s equally important to be watchful for potential insurance frauds and scams that stem from these myths. At National SIU, our insurance fraud investigation experts perform high-end fraud insurance claim investigations so that the real criminals get apprehended.