15 Home Insurance Myths to Watch Out For!

15 Home Insurance Myths to Watch Out For!
Buying perfect Home insurance according to your needs is a tricky business. Read the clauses of the insurance policy before you buy it. If you don’t read it correctly you would not understand what the insurance company is offering you. We will discuss in this article the top 15
15 Home Insurance Myths to Watch Out For

Buying perfect Home insurance according to your needs is a tricky business. Read the clauses of the insurance policy before you buy it. If you don’t read it correctly you would not understand what the insurance company is offering you. We will discuss in this article the top 15 home insurance myths that people believe in. They have a wrong idea about the policy. So let’s start correcting our myths about the home insurance policy.



15 Home Insurance Myths you should be wary of!


#1. MYTH: You should own a home insurance policy.

Reality: You don’t have to buy a home insurance policy. It is not mandatory like auto insurance. Often the lender or the bank will ask if you have homeowners’ insurance or not. They will ask you to write down the policy that you own. If you are renting any property the landlord may ask if you have a renter’s insurance. If you have these insurances then it is good for you. But if you don’t it would not stop you from getting a loan or renting a property. They are not mandatory according to law.


#2. MYTH: My house is always covered even if I am on a tour.

Reality: This is not true. If you are going for a vacation without taking any precaution then the insurance company may not cover you if something happens to your house. You should close the water supply of your house. You also have to ensure that the room temperature remains normal. If you don’t take these precautions then the insurance company can disown your insurance plan.

Also read: When Can You Claim for Water Damage Coverages on Home Insurance

Ask your insurance provider at what interval someone should check your home to see everything is fine. Normally once a week is fine. But it varies company wise.


#3. MYTH: My valuables are also covered.

Reality: A home insurance policy usually covers your property and most of the valuables up to a limit. But it doesn’t cover all of them. You have to buy extra coverage for that. Like if you have valuable jewels at home you should opt for extra coverage because normal home insurance won’t cover it. Usually, home insurance covers valuables only up to a limit of only $1500 or $2000.


#4. MYTH: My home insurance policy will also cover me from sewer backup.

Reality: When the sewer system fails to handle the water volume the water comes out from the toilets and drains. Your house becomes a mess. Most of the insurance companies offer this protection as optional. It is not available in the regular plan. Only a few companies include it in a standard insurance policy.


#5. MYTH: Insurance policy protects against flooding.

Reality: Generally home insurance policy protects you from accidental release of water from pipe bursts. But it doesn’t protect you from actual flooding. Very few insurance companies will protect you from actual flooding where the water enters your house due to flood in the river or flood due to heavy rain.

Also read: Mobile home insurance: do you really need it?

So it depends on what insurance company you have chosen. In most cases, you have to buy a separate policy for it.


#6. MYTH: Home insurance policy only covers the house.

Reality: Home insurance policies not only cover your house but also the belonging that you have in it. If you are rebuilding your house the policy will cover for your rent expenditure and the personal liabilities that you may face.


#7. MYTH: Home insurance offers the market value.

Reality: The home insurance policy doesn’t cover the market value of the house. Home insurance doesn’t include land value. So it gives you lower than the market value. Insurance is not for profit. They wouldn’t pay you higher. It only places you in the same spot where you were before the mishap occurred. It also calculates the depreciation factor of the house and pays you the actual value of the house.


#8. MYTH: It covers you from earthquakes.

Reality: A standard home insurance policy doesn’t cover you from earthquakes. If you want protection from the earthquake you have to buy an “earthquake rider” along with your current policy.


#9. MYTH: Old and less expensive house insurance is cheap.

Reality: This is wrong. The old houses usually attract a higher insurance premium. As there is a risk of damages. Insurance companies generally give discounts to the brand new houses as chances of damage are very less in this type of case.


#10. MYTH: Insurance covers damages from termites and other insects.

Reality: No the insurance companies don’t cover damages of your house from termites and other insects. Keep in touch with pest control. Inspect your house once in a while to see if there are any damages due to the insects.


#11. MYTH: Home insurance covers my condo.

Reality: Home insurance generally covers the building structure. It doesn’t cover your condo. So don’t believe this.


#12. MYTH: Landowner’s insurance will cover the tenant.

Reality: If you are renting a property you are not the owner of the property then the landlord’s insurance will not cover you. If you want to have the protection you have to buy a renter’s insurance.


#13. MYTH: Acts of God are excluded by home insurance.

Reality: No they are not excluded in the policy. Most of the insurance policies give coverage from lightning, wildfire, etc. Although, if you want protection from earthquakes you have to purchase a rider policy for it.


#14. MYTH: If I injure myself the home insurance will cover me.

Reality: No the home insurance policy won’t cover for your injuries. It will cover if someone who is visiting your house injures himself accidentally. It should not be intentional.


#15. MYTH: Home insurance doesn’t cover Dog bites.

Reality: This is not true. If you properly give answers to the question your home insurance policy will cover the medical cost of the third party.




These were the top 15 myths related to home insurance. Now by reading the article, we hope you have a clear idea about the myths. There are other types of myths present. We have discussed only the most important ones. 

Read Also: Homeowners Insurance Doesn’t Cover These 6 Things

Consult with your agent about these points before choosing any home insurance plans. Check if they cover these in the policy. You can also ask your financial advisor. Take a quotation from the insurance companies. Choose the right kind of insurance plan that suits you. If you have any doubts, then let us know through your comments in our comment box below.

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