Common Things that Homeowner’s Get Wrong about their Homeowner’s Insurance Policy

Home insurance is designed to cover you in the event that your home is damaged. You pay a monthly fee so that if and when you need to use your policy, you don’t have to spend your entire savings trying to cover the damages, or worry that you won’t have enough money to even cover the damages.

Many homeowners think their home insurance covers them in any and all circumstances. Unfortunately, that’s just not true, and thinking it is could put you in a tough (and expensive!) position if and when you file a claim.

So, what are the things most people get wrong about their home insurance? A recent article from realtor.com outlined common incorrect assumptions people have about their home insurance policies, including:

• Their policy covers every kind of disaster. Many homeowners think that their home insurance policy will cover them in the event of any and all disasters. But unfortunately, that’s often not the case. For example, most standard home insurance policies don’t cover flood damage, which could be devastating if you find yourself in the midst of a natural disaster, like a hurricane or flooding event.
• They don’t need flood coverage unless they live in a flood zone. While there are certain places that are historically more prone to flooding—like coastal areas, which are more likely to have hurricanes—there have been more extreme weather patterns, even in areas where you wouldn’t expect certain types of disasters. So, even if you don’t technically live in a flood zone, you still might want to have a flood policy in place.
• They don’t realize they have to pay a deductible before their insurance kicks in. Many people think insurance will cover all of their damage-related costs, but they’re forgetting the deductible. Insurance deductibles typically run between $1000 and $5000, which means that you will have to shell out that $1000 to $5000 before your insurance will pay for any damages.