Homeowners insurance often flies under the radar until disaster strikes. By then, it’s too late to discover any misunderstandings you had about your policy. Let's clear up some myths about homeowners insurance so you can make informed decisions when it comes to protecting your home here in Northcentral Pennsylvania.
Myth #1: Homeowners Insurance Covers Everything
Many believe that homeowners insurance covers every possible disaster or damage. However, standard policies have significant exclusions, including:
- Flood damage: Homeowners in the flood-prone areas of Northcentral PA often need a separate policy through the National Flood Insurance Program (NFIP) or a private insurer.
- Earthquake damage: Quakes are rare here, but if you're concerned, coverage is available as an add-on or separate policy.
- General wear and tear: Insurance covers sudden and accidental damage, not gradual deterioration.
- Sewer backups: Standard policies usually exclude this, but you can add a rider for extra protection.
Reading your policy thoroughly can help you understand the specifics of what’s covered and what’s not.
Myth #2: My Home is Insured for Its Market Value
In Northcentral PA, the market value of homes includes land and local demand, but insurance focuses on the cost to rebuild. With construction costs fluctuating, it’s wise to periodically review your coverage to ensure it aligns with current rebuilding costs.
Myth #3: If Someone Gets Hurt on My Property, It’s Always Covered
While your policy includes liability coverage, there are exceptions, especially if negligence is involved. For instance, if an injury occurs due to an ignored maintenance problem, such as a failing deck, you could be liable beyond your policy’s limits. And if you run a home business, standard policies may not cover injuries related to that activity.
Myth #4: My Policy Covers My Valuables Fully
High-value items like jewelry and art have coverage limits in standard policies. You might only be reimbursed for a fraction of the item’s value, so consider adding a personal property endorsement for full coverage. Regularly reviewing and appraising valuable items is a good practice.
Myth #5: I Don’t Need Additional Insurance Because I Work from Home
With more people working remotely, many homeowners assume their standard insurance fully covers work-related equipment and activities—but this is a common misunderstanding. While a standard homeowners policy may offer limited coverage for business property, it often has restrictions on the value of work equipment it will reimburse and may not cover items owned by your employer at all.
Key Coverage Gaps:
- Limited coverage for work equipment. Your policy may only reimburse up to a certain amount and might not cover employer-owned equipment at all.
- No business liability protection. If a client, customer, or delivery person is injured on your property, you could be personally responsible.
- Business inventory may not be covered. If you store products or materials at home, your standard policy likely won’t protect against theft, fire, or other damage.
How to Stay Protected:
To make sure you’re fully covered in this scenario, you can consider the following options and decide which is right for you:
- Home-based business policy. Offers broader protection for business property and liability.
- Business property endorsement. Increases coverage limits for work-related equipment.
- Commercial liability coverage. Protects against lawsuits if someone is injured while visiting for business purposes.
If you work from home, check with your insurer to ensure you have the right coverage—before an unexpected loss occurs.
Myth #6: Homeowners Insurance Covers Mold and Termite Damage
Issues like mold and termite damage are usually preventable with proper maintenance, so they're not covered. If mold is due to a covered event, like a burst pipe, your policy might help with remediation, but longstanding issues are typically your responsibility.
Myth #7: If My Neighbor’s Tree Falls on My House, They Pay for It
Your policy usually covers damage to your property, regardless of where the tree came from. If your neighbor was negligent, you might file a claim with their insurer or take legal action, but generally, the responsibility falls on your policy.
Myth #8: Filing a Claim Always Leads to Higher Premiums
Not necessarily. Insurers consider various factors, including claim types, history, and your location in Northcentral PA. A single small claim might not affect your premium much, but frequent or high-value claims likely will. Weigh repair costs against your deductible before filing a claim.
Homeowners insurance is crucial, but policies vary. Knowing what’s covered can help you avoid surprises. If you have questions about your coverage in Northcentral PA, let's chat and make sure you’re well-protected.
