When new homeowners move into a home, they are often so excited to start their new life in a new location that they often fail to pay close attention to their house insurance policy. According to the company InsuranceQuotes.com, North Americans have a lot of misconceptions about their house insurance. These misconceptions can result in thousands upon thousands of unexpected out-of-pocket expenses for homeowners.
With that said, many house insurance policies can be tailored to suit your needs. Once you know what may or what will almost certainly not be covered in a standard policy, you can begin to work on purchasing the best policy for your needs and lifestyle.
Misconception #1: Your Home Can Be Left Vacant
Retirees who enjoy going on lengthy vacations in their RVs and motorhomes are often caught off guard – and unprotected – because of this common misconception. Though the amount of time you can be away from your home may differ from insurance provider to insurance provider, the general rule is that a home cannot be left vacant for more than 30 days. After that point in time, your home may not be covered for any losses. This includes if you are the property owner and are renting out the home and do not have any tenants.
Misconception #2: Mold Is Covered under Your House Insurance Policy
InsuranceQuotes.com research found that 41% of Americans thought that their homeowners’ insurance policy would protect them against mold and mold mediation. This is particularly important for homeowners to understand, as mold mediation can easily cost tens of thousands of dollars.
Mold is never covered under your basic house insurance policy and often will never be even after negotiating with the insurance company. Shop around and see if you will be able to find coverage, however, if this is a pressing concern.
Misconception #3: All of Your Jewelry May Not Be Covered
This is one part of a house insurance policy which is usually negotiable. The standard house insurance policy may only offer coverage anywhere from $2,000 to $10,000. Without appropriate coverage, the loss of these items could be financially significant.
Professionals who work in the insurance industry suggest that consumers have their fine jewelry appraised so that they understand the value of their pieces. After that, they can typically purchase an extension for their policy. Be sure to have any receipts and/or photographs of your fine jewelry to show the insurance agency, and hold on to these in case you do need to make a claim.
Misconception #4: Your Collections May Not Be Fully Covered
If you are a collector of any type – stamps, antiques, sports cards, etc. – then you need to carefully research your house insurance policy options. Standard options will cover no more than up to $1000 worth of these items should they become damaged, lost or stolen. If your collections are worth more than what the policy is offering, shop around or see if you can purchase additional coverage.
Misconception #5: Sewer Backups Are Often No Longer Covered
For a long time backed up sewer coverage was a part of every basic policy. Today, however, sewer backups are often excluded from a basic policy. Most house insurance companies will still have this option available, but you will need to purchase a specific policy extension to cover it.
Misconception #6: Earthquakes Are Not Covered by Basic Policies
This makes sense for the insurance industry, as one single earthquake could have their profits falling into the red. For a homeowner who has his or her home destroyed by this natural disaster, however, it does not seem to make much sense.
51% of Americans do not know that earthquake damage is typically not covered by their house insurance policy. Depending on where you live, you may be able to obtain coverage through an extension of your policy.
Misconception #7: Stolen Items from Vehicles Will Not Be Covered
Here is one of the more positive misconceptions on the list, though it is still important for home and vehicle owners to know so that they receive compensation when it is deserved. 73% of Americans are apparently completely unaware that belongings stolen from their vehicles are actually covered by their house insurance policy. The majority of house insurance policies do offer coverage up to a certain amount with extensions being available through some insurance providers.
Tips for Saving on Your Home Insurance
Making sure that what you need to have covered is covered is the most important part about shopping around for a house insurance policy. But homeowners should not be too quick to settle on one single insurance provider. Homeowners can save thousands of dollars over a decade or less if they simply “shop smart” when looking into their house insurance options.
Look into Lumping All Insurance Together
Many of the insurance providers in the United States today offer discounts to homeowners who lump or bundle two or more different types of insurance together. When looking into costs, see how much you could be saving on all of your insurance premiums if you were to lump your home, auto, life and even medical insurance together.
Increase the Deductible
If the home insurance policy you're looking into is too expensive, see how much the premiums would be if you increased the deductible to $500 or $1000. While that may be a large lump sum to pay should you need to use your home insurance, it could be far more manageable than paying a more substantial monthly premium.
- If you are able to pay annually, you will be able to save even more on your house insurance.
Make the Home a Safer Place
Increasing the safety of your home could have a positive impact on the premiums you pay. Some of the most common safety devices include:
- Installing a monitored alarm system;
- Installing smoke and carbon monoxide detectors; and
- Installing a sprinkler system.
Only Insure What You Need to Insure
Finally, as tempting as it may be to make sure all of your bases are covered by over-insuring, you may be siphoning hundreds of hard earned dollars needlessly away to your insurance company. Do include the value the land your home sits on when calculating how much coverage you need and only focus on insuring the buildings on the property.