The average person does not have a solid understanding of what their homeowner’s insurance policy covers. If this describes you, don’t worry — you’re not alone. This lack of knowledge by the general public has given rise to some dangerous misconceptions about insurance. These common home insurance myths could cost you and your family a great deal of money if you believe them. Here are four myths about homeowner’s insurance, followed by the truth…

This is probably the most common misconception. People think that since they pay premiums, their home is now bulletproof and any damages will be paid for by the insurance company. But this is so far from the truth. Coverage depends on your policy type and what riders or add-ons you have tacked on, but the standard homeowner’s policy covers very little. Some of the things that are typically NOT covered are floods, earthquakes, sinkholes, war (yes, really), termites, and Rodent damage

Again, it depends on your policy type. A typical homeowner’s policy has a limit of $500-$1000 for stolen jewelry and other valuable items. So if you have a lot of valuables, it’s important to list them separately on your insurance policy so that they will be fully covered in case of theft

This one is a bit tricky because it’s different for every insurance company and even every policy, so you really need to read the fine print. That being said, in most cases, your homeowner’s insurance will only cover the cost to rebuild your home—not necessarily its market value. So if your home is destroyed and you only have enough coverage to rebuild it, but not enough to buy a new home at today’s prices (assuming prices have gone up), you’re out of luck.

This is quite a common myth, but it’s far from the truth. Most homeowner’s insurance policies deny coverage for home-based businesses, especially if clients are going to your house or you’re storing merchandise among other things. Anything more than just office work can affect coverage. To clarify the issue, ask an insurance agent about business endorsements and whether your current policy offers protection in case of a business-related loss. You might need to purchase additional coverage for such a scenario as well.

As your independent insurance agent, we can help you debunk these myths and provide the information needed to properly cover your home and its contents. In our community, we work to make sure every policy meets your needs and budget. For more information on how we can assist you to find the right policy, contact us today!