logo
Dwelling Insurance
Renter's Insurance
Home Insurance
Artisan's Insurance
About Hanover
 
Home Fire Prevention Theft Prevention Contact Us Agent login
      Call Center: 1-800-919-FIRE

7 Common Assumptions About Home Insurance Not to Make...

We've all heard what happens when you make an assumption.

But the truth is even more serious. Assuming can cause a ton of heartbreak and even financial ruin when it comes to your home insurance. The problem usually lies in the fact that people all too often don't read the fine print when it comes to their home insurance policy.

This is vital. Read everything. In fact, read everything more than once. Especially the part of your policy labeled "exclusions."

When tragedy strikes, such as what happened to the east coast with Hurricane Sandy in 2012, people frequently learn some very disheartening news about the wrong assumptions that they made with their home insurance. So it's important to fully understand your insurance policy.

To help you more fully understand your insurance policy we’ve put a little something together...


7 Common Home Insurance Assumptions Not to Make to Avoid Further Heartache During a Tragedy...


Assumption #1: Your Insurance Covers Floods...

The truth is that you don't actually need to be living directly near an ocean or river to need flood coverage. As we've seen recently with weather conditions, not many people are safe from flooding, even when they think they are far enough inland.

However, most people simply assume that their home insurance covers flooding. It does seem quite logical. Floods happen and they can quickly and severely damage your home. Yet flooding coverage is simply not in your normal policy. Flood insurance is a separate type of insurance all together.

It's up to you to make the decision of whether or not you need it by weighing out the risks and likelihood, but it's vital to be aware of the fact that unless you’ve purchased flood insurance separately, you will not be covered if flooding occurs in your home.


Assumption #2: Injuries to You and Your Family Inside Your Home Will Be Covered By Your Home Insurance...

One of the big mistakes that people make when it comes to home insurance is thinking that if family members or someone living in the home gets hurt, their medical costs will be covered by the insurance

The medical payment portion of your home insurance is for guests who get injured in your home or on your property. Family members and anyone living in the home will not be covered. Your personal medical insurance is responsible for covering these types of events.


Assumption #3: Your Insurance Will Reimburse You For What You Tell Them You've Lost After a Tragic Event...

Your homeowner's insurance covers your possessions, true. However, if after an event your things are destroyed, simply recalling by memory everything that you lost and listing what you think things are worth for your insurance company will not work.

Just think of the rampant fraud that would happen if that was true. Rest assured the insurance company will ask for proof.

You MUST take a detailed inventory of your possessions in order to be reimbursed in the case of a tragic event. This includes purchase dates, receipts, serial numbers, and even photos if possible. The more evidence that you have, the more likely that it is that you will receive a full reimbursement.

Just as importantly, you'll want to keep this inventory in a safe place. A fire-proof safe is an excellent first step. Better yet is a safety deposit box at your bank where the list will be kept even safer. Keeping your inventory list outside of your home is your best bet to prevent it from being destroyed along with the rest of your possessions in the case of a tragedy.


Assumption #4: You'll Automatically Get the Full Amount for Items Like Jewelry and Electronics...

Far too many people feel secure about their home insurance, figuring that if anything were to happen to their more expensive items like jewelry and electrical appliances (Flat Screen TV's), or antiques (firearms, furniture, etc.)...that they'll automatically be covered for the full price.

The truth is, most home insurance policies have a price cap on these items. These caps can either be a flat amount (i.e. $500) or a percentage of your total coverage (i.e. 10%).

If you have items worth more than the price cap, you should speak to your insurance agent about buying extra or special insurance on those specific items.


Assumption #5: You'll Be Reimbursed the Purchase Price of Your Home In the Event of Total Loss...

On the surface this is a logical assumption, however, when you dig deeper the actual truth proves even more logical.

When you purchase a home, you're purchasing the physical dwelling of the home, but you're also purchasing the land beneath that dwelling. That land price is relative to many things, the number one being location. Therefore this is not how your actual cost value is calculated by your insurance company, and rightly so.

The actual way that your insurance works is by calculating how much it would cost to replace your home in the face of a total loss.


Assumption #6: Filing a Claim Will Most Certainly Skyrocket Your Insurance Premium...

We all hear nightmare stories about people making a simple claim and their insurance rates skyrocket, or their insurance company drops them all together. Perhaps there's a little truth to that, but not exactly the way the tale is actually told.

The truth is more like this... If you have a run of bad luck and you end up filing a string of claims over a short period of time, than yes, there is a chance that you'll see your rates increase. A good chance in fact.

However, one claim after a long run of no claims probably won't affect your premium much.

Just make sure that before making small claims you calculate the actual cost of repairing the problem yourself out of pocket versus the increase that you might see in your premium.

If you do see an increase in your home insurance premium, you can easily offset that with discounts for things like adding smoke alarms and burglar alarms, adding a vehicle to your policy, or any other number of ways to get a discount. If you’re still unsure how to offset an increased home insurance premium simply contact your insurance company and ask.


Assumption #7: You Don't Need Home Insurance...

Technically, there are no laws that require you to purchase home insurance. But in reality, you really do need home insurance.

First of all, your lender will require you be insured until your home mortgage is at least 80% paid off. They have to cover the investment that they have in your home. So unless your home is paid off, or almost paid off, then you'll likely have to have insurance anyway.

Secondly, your home is your biggest asset. Your home being destroyed or damaged can cause you immediate as well as long-term financial ruin, and can put you and your family out on the streets. We know that you don't want this. The smart thing, though not lawfully required, is to purchase homeowner's insurance.

So there you have it. Now that you know the truth about purchasing homeowner’s insurance and why it is a necessity you’ll be able to avoid making any of the above assumptions.