After making the big investment of buying a home, the next step is to buy an insurance policy to protect your investment. The thing about home insurance policies is that they need to be fully understood before buying one of them but most home owners just make a contract with an insurance company without going through all the details. That is why they may not differentiate between facts and myths about home insurance. Let’s find out the most significant myths about home insurance policies that you need to know before signing a policy.
1. All damages are covered by the insurance policy:
This is a myth. The insurance covers the most common disasters that may result in damages. So if your policy covers fires and hurricanes but it does not cover earthquakes, then in cases of earthquakes you might not be paid any money. Also the insurance covers properties like jewelry and rare personal collections. That is why you may need separate policy that covers the other properties. The insurer will tell you about that option; it is called a rider and covers any property against damage or theft.
So consider having all your properties covered and don’t just rely on the home insurance policy.
2. What is loss of use?
Loss of use is when you can’t stay at your home while the repair process. Most people think that the insurance policy will cover the accommodation until the repair process of the home is completed but the policy does not cover it in most cases. If you don’t know this point, you may end up paying thousands of dollars to rent hotel rooms or an apartment for some time. Make sure that the insurance company will include loss of use term in your contract.
3. The market value of the house is the best:
One of the most common myths regarding home insurance is that the market value insurance policy is the best. The market value policy will pay you the amount of money that you will be agreed upon in the policy. That is not the best choice because the market value of your place and properties will change over time. Imagine if you bought your home with 10000 dollars and after 10 years a hurricane damaged it and you have agreed in the policy upon 10000 dollars to be paid in this situation; this amount of money will not even buy some of your properties. The best insurance policy is the replacement cost policy; it is higher to buy than the market value but it is better. It will allow you to replace everything in the policy with their actual prices when the damage occurs.
4. The medical injuries are covered for everyone:
If an accident happens to your son and his friends in your garden, the insurance policy will cover only your son’s friends. You and your family are not included in the policy. Of course we hope complete safety to you and your family but just in case. Unpleasant events happen so you should be prepared.
These are the most common myths among people about home insurance. Understand your rights well and be prepared for the things that are not covered in the policies too. Unfortunately, life cannot be guaranteed completely.