Insurance coverage can be confusing. Homeowner policies read like legal documents, and can be hard to understand.
Spend a few minute talking to an insurance adjuster, and you will understand how confused people are on this subject.
If you have any questions, you should not hesitate to pick up a phone and call your insurance agent or insurance company to have them clarified.
For this article, I interviewed someone who as been in the insurance business as a claim’s adjuster for over 35 years.
Here are 10 of the most common misconceptions about homeowner insurance.
1. Insurance is not a savings account. Some people will go their whole lives without ever filing a claim, while other people will have their homes burnt to the ground. Just hope that you are in the former group.
2. Insurance doesn’t cover wear and tear on houses, home upgrades, or the inevitable deterioration of your home. It only covers sudden and accidental loss.
For example, if one of your water pipes inside your home bursts, your insurance company is not going to pay to repair your plumbing. They will, however, cover the cost of the water damage done by the break.
Be aware that insurance does not cover the pipes that go from the curb to your house. This is important because if you get a leak, you may have a very high water bill that will be your responsibility.
3. All roofs deteriorate. You are responsible for replacing your roof when it gets old. Should you lose a few shingles in a wind storm, your roof will be repaired, not replaced.
4. Insurance does not cover flooding. If you live in a flood zone, you are required to buy government flood insurance.
5. If you have a theft claim, you must also file a police report.
6. There are limits on jewelry, collections and other items of value if they become damaged or are stolen. For full coverage you need to have special endorsements in place.
7. The coverage on your landscaping is limited in respect to dollar amounts and covered perils.
One example is that if a tree falls on your house during a windstorm, the house is covered, but not the tree.
Also, if your neighbor’s tree falls on your house, due to the wind, it is not his responsibility, and visa-versa. If a tree falls on your home because of improper use of a chain saw, then there is responsibility.
8. Damage that occurs to your home over a long period of time is not covered, whether you knew about it or not. Again, insurance only covers sudden and accidental losses.
9. You automobile is never covered under your homeowner policy, even if it is parked in your garage.
10. Basement flooding, or ground water, is never covered by insurance. It is your responsibility to do the necessary home maintenance to water proof your basement