Your Homeowners Policy
In times of trouble, your homeowner’s policy can be an important tool. This kind of home insurance is capable of protecting you from bearing the burden of certain repair costs and other expenses after an unforeseen disaster. These policies are a great help in situations where your property has become subject to fire damage, the aftermath of extreme weather, flooding, and more. The right homeowner’s policy can help you get back on your feet quickly and with less stress.
Getting to the Bottom of Things
Many insurance companies tend to use confusing linguistic terminology in one place or another within their policies. This can lead to a number of fairly common policy misconceptions, myths, and other frustrating miscommunications. These areas of confusion tend to go unchecked until a time of crisis rears its head.
What You Don’t Know CAN Hurt You
At ReBLDing, we want you to know what to watch out for so that you can get the most value out of your policies. The things that homeowners don’t understand about their policies can lead to misinformation that can really sting down the road. You definitely don’t want to find out later that something important isn’t covered.
Below, we have included some common myths and misconceptions about homeowners insurance. Some of these myths are even perpetuated with misleading terminology within the policies. We hope that this knowledge will help you better understand your options and assist you in protecting your property in the event of a catastrophe.
6 Common Homeowners Policy Myths and Misconceptions
Here are the top 6 homeowners policy misconceptions that you may not have heard of.
Myth 1: Premiums Will Increase With Every Claim
Actually, a single claim may not result in a premium increase of any sort. The damage in this area usually comes from filing multiple claims. Still, it’s a good idea to estimate costs before filing a claim to see if it is really worth taking the hit. After all, you don’t want to file when you can cover it and be surprised by an even worse incident a few months later. While this is unlikely, a good stance to take may be to “hope for the best, prepare for the worst. “
Myth 2: A Detailed Home Inventory is Not Needed
Many homeowners assume the value of their claim will be calculated by a lump sum of their damaged items and repair costs. This isn’t always the case. Some claim adjustments are required after it looks like certain items may be covered. Proof of ownership may be required by your insurance company. There are a few things you can do to protect yourself from losing out when it comes to proof of ownership claim adjustments and similar processes. There are many free worksheets available that you can fill out which allow you to do a home inventory from room to room. We recommend doing this. Better safe than sorry!
Myth 3: Damage is Always Automatically Covered
Certain types of damage are expected to be covered no matter what. These types of coverage include water damage, termites, weather damage, and other unforeseen catastrophes. In actuality, there are certain conditions that may apply which will prevent you from being covered. For example, in the state of Florida, where flooding is common, you’d expect a homeowners policy to cover flood damage. Guess what? It doesn’t. Coverage must be purchased separately. Watch for these little surprises. Just because something should sensibly be covered doesn’t mean that it will be.
Myth 4: Current Market Value is Considered When Determining Premiums
This is not always true. For instance, the cost of materials and labor today can easily surpass the market value of a home purchased years ago. On the flipside, luxury properties in coveted locations may inflate in worth over time. The rebuild cost for properties that have inflated in value will be much less than the worth of the property. Because of this, it’s smart to ensure that your insurance policy calculates replacement cost value so that you can avoid paying certain premiums for a property that has depreciated.
Myth 5: Renewal Doesn’t Impact Coverage
This is another common myth. In actuality, renewing your policy may have multiple stipulations and general policy updates attached to it. Reading the fine print is the first step to take when renewing coverage. If you don’t like the changes to your homeowner’s policy, you may want to look somewhere else.
Myth 6: Umbrella Policies Cover Everything
Personal umbrella policies sometimes claim to cover everything. Unfortunately, these policies may, in fact, have a few “leaks.” For instance, if you have an umbrella policy that covers your home, but at the time of an incident you are using your home for business-related reasons, you might not be covered. Additionally, umbrella coverage usually only kicks in after you’ve used up every other type of available coverage.
Remember, at ReBLDing, we can help. Our system allows you to select the contractors and repair professionals that you need for any job. We also help you track costs, communications, estimates, repair progress, and much more, all in a secure and user-friendly environment. At ReBLDing we can help you make your entire home repair or renovation process simple and stress-free!