Some myths in life aren’t all that bad; in fact, a few are pleasant. After all, what would the holiday season be without Santa Claus, and what parent hasn’t been grateful for the Tooth Fairy to calm down an anxious child?
But then, there are some myths that aren’t just damaging: they have the potential to be outright catastrophic. And unfortunately, 6 enduring home insurance myths are on this list. These include:
Myth: You only need to insure your home for the purchase price.
Truth: The purchase price or estimated value of your home may not — and typically doesn’t — represent the cost to replace or restore it through a masonry contractor. Indeed, many people each year are shocked and devastated to discover that they are on the hook for tens or hundreds of thousands of dollars after a fire, tornado, hurricane or flood. (If you do find yourself in such a situation, contact a trustworthy company like Brickworks Property Restoration for professional assistance.)
Myth: All of your belongings are covered.
Truth: A standard home insurance policy will only cover some of your belongings — not all of them. Or, there will be coverage limits that won’t cover the replacement cost for things like jewelry and collections.
Myth: Your home-based business assets are covered.
Truth: If you operate a business at home, then you need additional coverage for your assets such as your computer, printer, office furniture and so on. If you store customer assets in your home (e.g. if you repair computers and keep them in your basement), then those aren’t covered by standard home insurance, either. If there’s a flood, fire, or theft, you’ll be on-the-hook to compensate your customers for their losses.
Myth: You’re automatically protected from sewer backup damage
Truth: While a few insurance companies are starting to include sewer backup damage in their standard policies, most do not. It’s essential for you to check your policy and see what is covered. If necessary, get additional coverage before you need it — not after, because by then it will be too late.
Myth: Termite damage is covered by home insurance.
Truth: Unfortunately, if termites decide to snack on your home, then you’ll be responsible for paying exterminators to send them to termite heaven (or make that termite hell).
Myth: Just like your visitors and guests, members of your family are covered for a home-related injury.
Truth: Up to allowable limits, your liability is covered if visitors or guests injure themselves while on your property (which can include the front and back yard and not necessarily inside the home itself). However, this coverage does not extend to you and your family members. If you slip on your porch and sprain an ankle, then you’ll have to rely on your health insurance to cover physiotherapy and other costs — not your home insurance.
The Bottom Line
Unless you’re in the insurance industry, you might want to do a dozen — or maybe 100 — other things than go through your home insurance policy to see what’s covered and what isn’t. However, considering what’s at stake, it could be the smartest and safest thing you do all year.