Top 5 Misconceptions About Home Insurance
Five things you should know about homeowner's insurance that you don't already.
May 14, 2013 — -- intro: Imagine a nightmare scenario in which you learn your home needs mold remediation, costing tens of thousands of dollars. Many people incorrectly believe that a standard home insurance policy will protect against mold damage, but they are in for a rude awakening, said Laura Adams, senior insurance analyst with InsuranceQuotes.com.
But if you believed it should have been covered, you're not alone. According to a telephone survey of 1,003 adults living in the U.S., 41 percent believed a standard homeowner's insurance policy would protect against mold damage.
Another 51 percent aren't aware that earthquake damage is not covered by a standard homeowner's insurance policy either.
Read more: When to Consider Renter's Insurance?
Here are five misconceptions about homeowner's insurance that could cost you:
quicklist: 1category: Misconceptiontitle: Home insurance covers all your possessions. text:Adams said there are categories of personal belongings, such as jewelry, cash, silverware and firearms that typically have caps on coverage.
"For instance, your policy may cover $10,000 for jewelry only, unless you opt to pay for additional coverage," she said.
quicklist: category: Misconceptiontitle: 19175865Home insurance pays for mold damage. text:
Adams said standard homeowners policies generally don't cover mold damage that results from neglected maintenance, such as a leaky faucet or pipe.
quicklist: category: Misconceptiontitle: Home insurance includes flood damage.text: Standard homeowners' policies don't cover floods—a separate flood policy is required. Where a home is located, such as along a shoreline, and the type of natural disaster is taken into account for coverage.
Read more: Top 6 Myths, Facts About Flood, Hurricane Insurance
quicklist: category: Misconceptiontitle: Auto insurance covers a theft from your vehicle.text:Home insurance covers theft of your personal belongings from a vehicle, even if the crime occurs away from your property, Adams said.
quicklist: category: Misconceptiontitle:Home insurance should be equal to the market value of a property.text:"Coverage for your dwelling should be based on the cost to replace the structures on your property, but should never include the value of your land," Adams said.
Read more: When to Consider Renter's Insurance?