Top Myths About Homeowners Insurance That Need Busting

Homeowners insurance is often overlooked until a crisis hits—a tree falls through the roof, pipes burst, or worse, you're left scrambling to figure out what is covered. Let's cut through the clutter and clarify some common myths about homeowners insurance so you can make well-informed decisions for your home's protection in Massachusetts.

Myth #1: Homeowners Insurance Covers Everything

A widespread misconception is that homeowners insurance covers all types of damage. However, standard policies typically have exclusions, such as:

• Flood damage. Usually requires a separate policy through the National Flood Insurance Program (NFIP) or private insurers.
• Earthquake damage. Often available as an add-on or separate policy.
• General wear and tear. Insurance is meant for sudden and accidental damage, not long-term issues from neglect.
• Sewer backups. Generally not covered by standard policies, but can be added with a rider.

Always read your policy to know what's covered and what's not.

Myth #2: My Home is Insured for Its Market Value

Insurance is based on the cost to rebuild, not the market value of your home. Replacement cost focuses on materials and labor to reconstruct, while market value includes land and location. With fluctuating construction costs in Massachusetts, it’s essential to periodically review your coverage to ensure it’s sufficient.

Myth #3: Injury Claims on My Property Are Always Covered

Liability coverage protects you if someone gets injured on your property, but there are limits. If negligence is involved or if you run a business from home, you might still be at risk for damages beyond your policy limits. Check if you need additional coverage for your specific situation.

Myth #4: My Valuables Are Fully Covered

Standard policies often have limits for high-value items like jewelry, artworks, and electronics. If the value of your belongings exceeds these limits, consider adding a scheduled personal property endorsement to cover them fully. Regularly review your policy and keep an updated inventory.

Myth #5: Standard Insurance Covers Working From Home

Remote work has become more common, but standard homeowners insurance might not offer enough protection for work-related equipment or activities. To cover gaps, look into options like:

• Home-based business policy. More comprehensive protection.
• Business property endorsement. Increases equipment coverage.
• Commercial liability coverage. Protects against lawsuits related to business visitors.

Ensure you have the appropriate coverage before it's too late.

Myth #6: Mold and Termite Damage Are Covered

Most policies don’t cover preventable issues like mold or termite damage. If mold results from a covered event, like a burst pipe, it might be included. Otherwise, regular maintenance is crucial to avoid these problems.

Myth #7: Neighbor's Tree Damage is Their Responsibility

If a neighbor's tree damages your property, your insurance typically covers it unless there was negligence involved. You can potentially claim their insurance or take legal action, but generally, each homeowner addresses their own damage.

Myth #8: Filing a Claim Always Raises Premiums

This is not always the case. Insurers consider several factors before adjusting premiums, including your claims history and the nature of the claim. Weigh the cost of repairs against your deductible before filing.

Final Thoughts

Homeowners insurance is a must, but it’s not a catch-all. Understanding coverage and limitations helps avoid costly surprises. If you’re uncertain about your policy, review it with your agent to make sure you have appropriate protection.

Questions about how this affects your real estate decisions? Let's discuss.