Homeowner's Insurance FAQs: 7 Common Myths vs. Reality

What is Homeowner’s Insurance?

Homeowner’s insurance is the policy that provides protection for your home and ensures that you can afford to live if something disastrous were to happen to your home. A homeowner’s policy typically covers damage resulting from theft, robbery, and vandalism, as well as from natural disasters such as hail or tornadoes. Personal belongings are typically also covered if stolen or damaged. Associated structures, such as sheds and garages, are also covered by this policy. Most mortgage brokers will require that homeowners maintain homeowner’s policies to secure a loan, but they are not generally required by law. 

Homeowner’s Myth #1: Fixing Everything Yourself Keeps Your Premiums Low

Home maintenance is a real thing and a chore that should be kept up, both to ensure your investment remains protected and to keep your family safe. But not all home fixes should be your responsibility. If you’re affected by a covered incident, you won’t be penalized for filing a claim, and it can be helpful to keep your overall costs low. 

Homeowner’s Myth #2: A Landlord’s Policy Covers You as a Renter

A homeowner’s policy will protect the building and any of the landlord’s belongings. However, if you rent, your belongings will only be covered under a renter’s insurance policy. Renter’s insurance is encouraged to help cover your belongings, liability protection if someone is hurt, and any additional expenses incurred should you lose your home during a covered event. 

Homeowner’s Myth #3: Old Homes are Cheaper to Cover than Newer Homes

This myth perhaps stems from the idea that older cars are cheaper to insure than newer cars. But in reality, older homes might actually lead to higher rates because older homes have a higher risk of remediation. Outdated plumbing, older HVAC systems, and dated wiring are ways older homes can sometimes incur higher costs than newer homes. 

Homeowner’s Myth #4: Policies Cover All Natural Disasters

Homeowner’s policies generally cover natural disasters, but this can vary depending on where you live. For example, if you live in a flood zone, you will likely need to purchase additional flood insurance. Similarly, those living in earthquake-prone areas or coastal locations that could be affected by hurricanes may need supplemental policies. Always check to see if your homeowner’s insurance has any policy exclusions. 

Homeowner’s Myth #5: All Personal Belongings are Covered by My Policy 

While it is true that most of your personal belongings are covered by homeowner’s insurance policies, it will not cover specialty or expensive items. If you have highly valuable items such as jewelry, collectibles, or rare art, you will need to insure those items separately. 

Homeowner’s Myth #6: My Coverage Protects Me Even if My Home is Empty

Most often, homeowner’s insurance will only cover a vacant home for a very short period of time. This is because vacant homes are more likely to be vandalized or damaged, as there are no occupants to deter crime. Due to a vacancy clause, most homes will not be covered if they have been empty for an extended period of time. 

Homeowner’s Myth #7: Renovations Won’t Affect My Insurance

Renovations can sometimes increase or reduce the risk to your home. Given that, any renovations you make to your home can change the terms of your coverage. For example, repaving an old driveway could lessen your risk, whereas adding a swimming pool could increase it. Make sure you review any renovations with your agent to understand how they’ll affect your coverage. 

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