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As a homeowner, you know the ups and downs of owning a home. You also know there are some events that are ultimately out of your control. That’s why it's important to minimize your overall insurance risks in your home the best you can. Before purchasing any homeowner’s insurance, here are the top misconceptions about homeowner’s insurance you should know.
1. Does a homeowner insurance policy cover everything in my home?
Unfortunately, no. A Homeowner’s Policy covers you in many areas:
- the “dwelling,” or structure of your home
- detached buildings (such as a garage or shed)
- your personal property (belongings)
Additionally, your personal property is protected against theft, even if the theft occurs outside the home. Unfortunately, this doesn’t mean that everything in your home is covered.
Nearly all home insurance policies place a sublimit on certain high-value items. Jewelry, fine arts, furs, and tech equipment that typically have fluctuating and higher values will generally be required to get appraised and added to your policy as a separate rider. In the absence of an agreed upon appraised value, these items could be underinsured or not covered in the event of a loss.
2. Does a home insurance policy cover me for all natural disasters?
One of the biggest misconceptions about home insurance is that flood coverage is included. Unfortunately, that is not the case. If your home has damage due to a flood, you wouldn’t be able to file a claim with your homeowners insurance company for the damage.
Instead, to protect your home and personal property from water damage caused by flooding, you will need to add a flood coverage endorsement, which is often not available. You can also purchase a standalone flood insurance policy. Many home insurance carriers offer flood insurance policies through FEMA’s National Flood Insurance Program (NFIP).
3. Can I get sued if a trespassing child gets hurt jumping on my trampoline or in my pool?
In some cases, yes. The attractive nuisance doctrine holds that a landowner may be held liable for injuries to children trespassing on the land, if the injury is caused by an object on the land.
Some homeowner’s insurance companies have started asking new applicants questions specifically regarding pool and trampoline safeguards. In addition to safeguarding these, the next best protection is to purchase the maximum liability available on your home insurance policy.
4. My home market value has increased significantly in the past two years. If my house is destroyed in a fire will my insurance company reimburse me the current market value to rebuild?
Most insurance policies are written based on replacement costs, which is what it will cost to replace your home on its current foundation. Market value is taken into consideration, as well as the value of the land, neighborhood, etc.
5. I hired a Contractor to repair a section of my home and they found extensive termite damage. Can I submit a claim on my homeowner’s insurance policy?
Termite damage and other pest infestations, including bats, mice, and rats are not covered by homeowner’s insurance policies. Your home insurance policy is designed to protect you from sudden and accidental damage.
Most pest infestations happen over time, which means insurance companies consider them preventable. A homeowner’s insurance policy excludes coverage for any maintenance issues and regular wear & tear, as they expect owner’s to be responsible for the proper upkeep of their home.
6. My neighbor’s tree is leaning dangerously toward my home. The next windstorm will most likely send it crashing on my roof. Will my homeowner’s insurance company pay to remove it or will my neighbor’s homeowner’s insurance pay if it does fall and create damage?
The answer to both questions is no. Unfortunately, an insurance company would rather pay for the damage to the home after it occurs, than pay a lessor amount of money to avoid a potential tragedy. Any tree on your property that needs maintenance to avoid a claim is your financial obligation. If your neighbor’s tree damages your roof, their insurance company will not pay. That claim gets paid by your insurance company (less the deductible, that is your responsibility).
Most experts agree that if your neighbor’s tree is dangerously perched over your roof, that it is best you provide some documentation that your neighbor was warned of the potential danger, and it was ignored by them.
It's important to know what your homeowner’s policy does cover should there be an accident. Talk to you Broker about having the right insurance in place. If you have any other insurance questions regarding your upcoming projects or corporate policy renewal, reach out to TSIB for a free risk review.
TSIB’s Risk Consultants are currently servicing the following locations:
East Coast: New York City, NY; Bergen County, NJ; Fairfield County, CT; Philadelphia, PA
Texas: Austin, San Antonio, Houston, Dallas
California: Orange County, Los Angeles County, Riverside County, San Bernardino County, San Diego County