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  • Writer's pictureJoyce Insurance

5 Common Myths About Homeowners Insurance

A homeowners insurance policy can protect your home and belongings. However, there are lots of misconceptions flying around that you could make mistakes and discover the limitations of your policies when it's too late. In this article, we clarify some of the common myths about homeowners insurance. 

Myth 1: Homeowners insurance covers everything

Many people think homeowner's insurance is a catch-all shield that fully guards against any possible damage. Although it provides security against common threats like fires, theft, and specific natural disasters, it certainly doesn't cover every scenario. 

For example, damages resulting from floods or earthquakes usually demand extra coverage beyond the standard policy.

Myth 2: The market value equals insurance coverage

A common belief among homeowners is that the insurance coverage should match the market value of their home. But in reality, the coverage is calculated based on the expenses required to rebuild or repair your home, not its market value. 

Factors like labor costs, materials needed, and other rebuilding expenses determine the coverage amount rather than the home's market price. You should understand this difference to ensure that your insurance policy provides adequate protection for your home.

Myth 3: Home insurance covers home-based businesses

Just because you run a business from home doesn't automatically mean your homeowners insurance fully protects it. Usually, standard policies offer only limited coverage for business equipment or liability associated with home-based businesses. 

Investing in a separate business insurance policy might be necessary to ensure comprehensive coverage. It's vital to explore this option to safeguard your home-based business effectively.

Myth 4: All personal belongings are covered

Though homeowners insurance generally includes coverage for personal belongings, it's important to note that high-value items such as jewelry, artwork, or expensive electronics might have limitations on coverage. 

You might need additional coverage to protect these valuables adequately. This step can provide the necessary protection for your prized possessions in case of unforeseen events.

Myth 5: Renovations and upgrades don't affect insurance

When you make upgrades or renovations to your home, it's essential to understand how they can affect your insurance requirements. If you don’t update your insurance policy to account for these changes, you could be underinsured if a disaster occurs. 

Ensuring your policy reflects the modifications made to your home is crucial to guarantee adequate coverage in case of unforeseen events. This step can provide peace of mind and better protection for your home and investments.

Protect your home and belongings with the right insurance policy 

Homeowners insurance is far from all-encompassing. Depending on your residence type, the activities that go on there, and the nature of your immediate surroundings, you may need other insurance policies to complement your homeowners insurance. 

Contact us for questions about your existing coverage or to get a free quote. We’ll find you a homeowners policy that offers the most protection at the most affordable pricing. 



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