Myths That could impact your home and content insurance coverage

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Home insurance is complicated. With all the advice surfacing the web, it may all seem somewhat overwhelming from time to time. This means that you have to be aware of what claims are correct, and which ones are just myths, to ensure that no financial harm is caused by misunderstanding your policy.

Today, we are in the mood for some myth-busting, so take a look through these home insurance myths, and make sure you are aware of the respective underlying truths.

1. Home insurance is a waste of money.

False. In reality, home and content insurance should be viewed as a financial safety net to help you protect the investment that you have made in your house.

Just take a moment to considers the extensive damage that could arrive should a fire start while you were away, or if a tree were to fall onto your roof during a stormy night. While of course, home insurance may seem relatively expensive for something that is “invisible”, but having home insurance can make a big difference for you in terms of both finances, and your peace of mind.

2. My home should be insured for its market value.

The best option is to insure your home for its replacement costs. This means taking me to account all of the expenses associated with building your home again, such as building materials and construction materials.

Should you insure your home solely for its market value, it may not give you the full coverage that you would need to build your home from the ground up.

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3. My belongings are covered.

Not quite. Of course, home content insurance protects your personal belongings. But you will have to do a little bit of digging through your policy to see what limits and what losses are covered. For example, you may have to add a certain amount of coverage for valuables, jewellery or other collection items.

4. My policy will replace my belongings as new.

Not quite either. Any reimbursement that you will receive for your personal belongings if they are destroyed depends on the exact amount that they are insured for. If they are insured for their ACV, then your provider will pay you out for the value of your belongings at the time they were destroyed. Meaning you will receive the depreciated amount for the belongings.

Replacement cost value coverage means your belongings will replace at today’s value. Your possessions can replace, regardless of their depreciated value when they destroyed.

5. Flooding is covered

Not always true. This myth is quite a dangerous one. Flooding won’t still be covered by home insurance. So during the event of a rough storm, like we have seen in Ireland over the past couple of years, you may not be covered. If you would like the peace of mind in knowing that your home is protected in the event of a flood, you must go through an agent and get flood insurance from them.

6. My business (based from home) will be covered

Not always, you must have the right home-based business insurance to ensure that your inability and your equipment are all covered. You may only need to add an endorsement to your home insurance policy to cover for your computer. Otherwise, you may need a more extensive home-based policy. Or perhaps, depending on the size of your business, you may need a larger business owner policy.

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7. An injury in my home is covered

Not entirely true. While it is true that your liability will be covered, meaning that the responsibility you have for others who are injured on your own property. So, if you have guests, and they are hurt, your responsibility will be covered in the home insurance policy.

8. Belongings outside of your home are covered

Not true. Should you frequently carry valuable items around with you, such as a musical instrument or a laptop, you may it re-assuring to know that they are financially protected when you’re out.

However, it can’t just be assumed that home and content insurance will cover your belongings for damage when you are outside of the house. You may be required to take out cover for personal possessions as an extra, just to be sure they are covered.

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