The insurance industry is filled with intricacies and complexities that often turn into tall tales and myths that could end up being costly for uninformed homeowners. Since the purpose of Vista homeowners insurance coverage is to mitigate risk, it is worrisome to know these myths tend to propagate at alarming rates. With this in mind, here are five commonly heard misconceptions about homeowners insurance and the truths behind them.
1. You Don’t Need a Personal Property Inventory
This is an alarming myth that emanates from the incorrect assumption that homeowners insurance only covers structural damage. While there may be some policies that have low limits in terms of personal property loss, homeowners should not assume underwriters, adjusters, and claims processors will assign the max payout limit without an inventory. At the very least, homeowners should write down a list of items along with their estimated value. Ideally, this list should be reviewed periodically to include new items.
2. Your Jewelry and Artwork Are Automatically Covered
The limits on certain valuable items kept at home are very low for most homeowners insurance policies. Additional coverage can be purchased from the same insurance company, but it may require obtaining proper appraisals and attaching policy riders.
3. Your Homeowners Insurance Will Protect You in Case of Flooding
In 2017, this myth will become a reality for homeowners in Texas and Florida whose properties were not recognized as being located on a floodplain and thereby not participating in the National Flood Insurance Program. Standard property insurance policies do not typically include flood coverage. For this reason, homeowners who live near floodplains may want to inquire about optional flood coverage.
4. You Only Need Fire Insurance to Get a Mortgage
The level of homeowners insurance required by mortgage lenders tends to feature more coverage than just fire protection, and this may not be the only policy required by the bank. There will also be title insurance and perhaps private mortgage insurance in cases when the loan-to-value ratio is high.
5. You Should Lower Your Coverage If Your Premium Is Too High
This is not only a myth but also a terrible idea. The best way to reduce premium payments is to lower the risk profile. This could mean installing a smart home security system or getting rid of a treehouse left behind by previous owners.
6. Your Premium Will Increase If You File a Claim
For the most part, insurance companies are prepared to settle initial and valid claims without having to adjust premium payments because they have already worked this possibility into their predictive modeling systems. However, premiums could rise for homeowners who submit multiple claims within a short amount of time.
If you have any questions about homeowners insurance, don’t hesitate to reach out to the insurance experts at American Tri-Star. In addition to home insurance, we are also a leading provider of Vista car insurance as well as commercial, health, and bond insurance. Call 760-758-1600 today for a free quote.