The Top 10 Home Insurance Myths with Susie Adib
As an insurance agent, my goal is to make things as simple and transparent as possible so you can feel good about your insurance decision. Here are the top insurance myths I’ve heard (plus one concern that is actually true!).
1. As a renter, I don't need coverage because I am covered under my landlord’s policy.
FALSE.
The landlord’s policy covers the building of the house. However, the renter's personal property such as furniture, toys, clothes, etc. are not covered by the landlord’s policy. You need renters’ insurance for that. Renters’ insurance also covers the renter for loss of use. In other words, if something happens to the house/apartment you are renting, then your policy covers money to stay in a hotel until you can move back in or find another rental.
2. Home insurance includes home maintenance. FALSE.
Home insurance covers a sudden accidental loss to your home. Home insurance does not cover wear and tear or anything considered to be maintenance. A home warranty however covers maintenance, like if the refrigerator is broken or the stove won’t work.
3. Home businesses are automatically covered by my home insurance. FALSE.
If you have a business you operate out of your home, you will need business coverage to cover your business equipment and/or products. While some carriers provide limited coverage for a home business, you can purchase additional coverage as needed.
4. It is cheaper to combine your auto and home insurance. FALSE.
You do get a discount for having more than one policy with the same carrier. However, some carriers will have better rates for the home than your current auto provider. So even with the discount, you may not be saving money.
5. If I file a claim, my rate will go up. TRUE.
When you file a claim, it could impact your premium. Changes to your insurance premium or rating will only happen at renewal. Some carriers will have a claims-free discount, and if you file a claim, then it will be removed. However, when it comes to a large claim like a fire or replacing the roof, it is worth filing the claim. It truly is your choice on what you feel you can afford to pay out of pocket. If, after a storm or hurricane, your roof needs to be replaced, then yes, this would impact your rate. However, you would also receive a new roof discount, which would offset most of that increase.
6. I cannot get home insurance because of the type of dog I own. FALSE.
Some carriers will have limitations on the breed of dog. But, there are always other carriers that will allow the dog.
7. I can’t change my home insurance. I can only go with who my lender approves.
FALSE.
You can always change your home insurance. Your new carrier will send the proof of new insurance to your lender. The lender just needs to be notified of who your new carrier is and the amount of coverage.
8. Home insurance covers anything in my house no matter how much it costs.
FALSE.
Your home insurance will cover your personal property. But, there are two coverages you need to ensure that you have. One coverage is replacement costs. This means that if you have a loss, then the item is covered for the cost to replace it at today's prices. The second coverage is for specific items such as jewelry, collectibles, gems, antiques, etc. There is limited coverage for these items, depending on the carrier between $1,500 to $2,500 unless they are scheduled on your policy. If they are scheduled, then they are covered up to the appraised value.
9. Home insurance is required by law. FALSE.
You are not required to have home insurance. However, your lender may require it as a term of your mortgage. If you do not have a mortgage, then you can “self-insure.” This means if there is a loss, fire, roof, lightning, etc., you would pay all of it out of pocket.
10. You must insure your home for the market value or the loan amount. FALSE.
You do not have to insure your home for the amount of the resale price or the loan amount. You are only required to insure your home for the amount of insurance it would cost to rebuild your home. The insurance carrier will determine that amount and, if needed, can provide proof to your lender. The home will be rebuilt up to the amount of coverage on your policy. Any additional money will not be returned to you which means you were paying extra for coverage you’d never use.
Susie Adib is a Sales Producer at Commerical Insurance Associates in Chantilly, VA. Her goal is to talk with you, understand you, and help you review your insurance options and find the perfect fit for you and your family. She enjoys working with all of her customers to help educate you on your coverage needs, provide effective and efficient communication, and make sure you have a great insurance experience. Contact me today at 703-895-1956 to make sure you have the best coverage that you need!