3 Myths About Home Insurance You Need To Know
A home is the biggest purchase you'll ever make, which is why you want home insurance to protect your investment. However, you may have some misconceptions about home insurance that need to be cleared up. Here are some of the common myths regarding home insurance.
Myth 1: Home Insurance Isn't Required To Have
Many people get confused about the actual requirements to have home insurance. It is incredibly common for lenders to require you to have home insurance when you have a mortgage. This is because the lender would take over the home if you were to stop paying the mortgage, and they would then sell it to make back their money. If you simply cannot pay the mortgage anymore the lender would take over your home as is. However, if the home were to be destroyed there is no longer a home to sell. That's why lenders require you to have home insurance.
However, once the mortgage is paid off and you own the home outright, you can do what you want when it comes to home insurance. You can decide not to have any home insurance if that is your choice, but it is not the best idea for such a big investment.
Myth 2: Home Insurance Covers Everything In Your Home
Your lender is only concerned that you have enough coverage to rebuild the structure of your home. They are not as concerned about all of the personal property within the home that you own. Don't make the mistake of assuming a basic home insurance policy will cover all your personal property, because it may not.
It is common for there to be exclusions for certain high-value items, such as artwork, jewelry, and firearms. There are also exclusions for property related to a business that you run out of your home, which includes equipment and inventory. You would need an additional policy to cover all your personal property, so do not make any assumptions about what is covered.
Myth 3: Making A Claim Will Raise Your Premiums
Don't feel like you can't make a claim with your home insurance policy for fear of the premiums going up. Premium increases related to claims are based on a variety of different factors. Theft or a liability claim may cause your insurance premiums to go up if you have repeated claims. However, a premium increase may be less likely if a tree falls on your home, especially because that tree can no longer cause future damage.
For more information, contact a local home insurance agent.