Home insurance is something all homeowners should understand inside and out before they even think about buying a home. If you don’t understand how home insurance works, you run the risk of getting exploited by an unscrupulous insurance company. They will be more than happy to exploit your ignorance and make you sign a policy that is more advantageous to them than to you. They might also make you believe that some things are mandatory when they aren’t. Let’s take a look at some of the most common myths about home insurance and the truth behind them.
Home Insurance is Mandated by Law
One of the things a lot of people falsely believe is that you are obligated by law to get insurance for your home, but it’s not the case. What is true, however, is that you may need to have insurance to qualify for a mortgage. So, if you’re using a mortgage to buy your home, then you’ll most likely need to get insurance. The provider will also need to be named in that policy. Also, know that a landlord may require that you get renters insurance before you can move in.
My House is Covered No Matter What
One of the things that surprise a lot of people about home insurance is that coverage is not unconditional. For instance, you can’t just leave for a vacation and think that your home will be covered for any type of damage. You may have to take precautions before you leave to prevent incidents, and, if you don’t take these precautions, you might have to pay for any damage caused by your negligence out of your pocket.
For example, if you leave during the winter and you haven’t emptied your pipes and shut off your water supply, you might not be covered if the pipes burst because of cold weather. Some providers will also require that you have someone check on your property if you’re leaving for a long time. They will often ask that someone comes every three to seven days, so that’s something you’ll have to check with your provider before you sign.
The Older the Home, the Cheaper the Insurance
Another common myth is that home insurance tends to be cheaper for less expensive, older properties. In reality, it’s your home insurance company that will determine how much you will have to pay. Some will have cheap rates on old homes, but in most cases, you can expect to pay more. This is because breakdowns in older homes are more common and can cost more to fix.
You’re Covered Against Floods and Earthquakes
This myth could have serious consequences. A lot of people assume that they will be automatically protected against floods when they get insurance. They often confuse damage caused by floods with water damage, which is often covered. If you want protection against water coming from outside of your property’s limits, you will need to get special coverage. The same thing goes for earthquakes.
These are all myths about insurance that you should forget right now if you’re shopping for a policy. Learn as much as you can about home insurance so you can avoid unpleasant surprises.