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9 Lies About Homeowners Insurance That Just Aren't True

Falling for these coverage myths can be costly.

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Updated Sept. 24, 2024
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Buying homeowners insurance is one of the most responsible homeowner money moves you can make. Without it, you could be up a creek without a paddle if there is a disaster.

However, there are still a few pervasive lies and rumors about this type of insurance that can throw even the most responsible homeowner off course. Here are some myths about home insurance that you should not believe.

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Homeowners insurance isn't worth the cost

Freedomz/Adobe real estate broker agent presenting

While the cost of home insurance has risen faster than the rate of inflation in recent years, it is still worth buying a policy.

Having such coverage might help you keep more cash in your wallet if a hurricane, fire, or other disaster hits and causes costly damage.

Unless you live in a zone that is particularly prone to natural disasters, the premium shouldn’t be prohibitively expensive.

Renovations won't increase my insurance costs

andrey gonchar/Adobe man at home laying laminate flooring - finishing

When you make improvements to your home, it becomes more expensive to replace. So, renovations often will cause your insurance costs to rise.

This doesn’t apply to all renovations. But if you overhaul a kitchen, add square footage, or install a pool, your rates might climb.

A policy covers everything you own

Vitalii Vodolazskyi/Adobe homeowners insurance policy and model of home

A homeowners insurance policy will cover many of your belongings. However, some items might not fall within the scope of coverage.

For example, your policy might not cover some types of expensive jewelry, firearms, silver, and other significant valuables. You can often purchase a rider to cover these items, however.

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You are covered for earthquake damage

agenturfotografin/Adobe man with inspection checklist

While an earthquake is a natural disaster, it’s typically not covered under a homeowners insurance policy. This is bad news if you live in an earthquake zone.

Even small rattles can cause structural damage, so check into purchasing a separate earthquake policy or a homeowners insurance policy rider that can provide you with coverage.

Your home business is fully covered

BalanceFormCreative/Adobe couple consulting female real estate advisor

Your business may reside in your home within a designated home office, but that doesn’t mean it’s covered under your homeowners insurance.

You might get a small amount of business coverage through a homeowners insurance policy. However, you will typically need to purchase a separate policy or a rider to make sure your home business is fully covered.

Older homes always cost less to insure

fizkes/Adobe woman works with bills invoices at home office

Older homes often are not shiny and new, and that’s exactly why they sometimes are more expensive to insure.

Old roofs, electrical systems, and plumbing are more likely to become damaged, which is why insurance companies often charge more to insure them. An old house can pose a bigger risk than a new house, and that leads to a larger premium.

You are covered for floods

smolaw11/Adobe red lifebuoy anchor on wood

As with earthquakes, homeowners insurance typically does not cover floods. Whether it’s flooding from a large rainstorm, a hurricane, or a flash flood, you need an additional policy to ensure you are covered in the event of a flood.

Most homeowners purchase flood insurance through the National Flood Insurance Program (NFIP).

Your house is covered if you leave it empty

MIND AND I/Adobe holding house model while writing on notepad

Did you know that if your house sits vacant for a period of time, it could become excluded from homeowners insurance coverage?

Insurers see empty houses as a target for either vandalism or damage caused by leaks that go undetected when there’s no one home. Check with your insurer to find out how long it needs to sit empty before it is no longer considered to be covered.

An insurer can't refuse me because of my dog

New Africa/Adobe golden labrador retriever

An insurer can refuse to sell you homeowners insurance simply because of the type of dog you own. Some insurers will not offer policies to owners of a handful of specific dog breeds.

If your dog were to bite a neighbor or visitor, it could make for an expensive insurance claim. Many home insurance companies don’t want to take on that risk.

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Bottom line

Freedomz/Adobe estate agent and customer shaking hands

If you want to get ahead financially, you have to be prepared. Homeowners insurance is a key element of such preparation.

Neglecting to have adequate homeowners insurance can put you in a precarious position if disaster strikes. So, don’t believe the lies on this list.

Instead, know what your policy does and does not cover, and take steps if you need to fill holes in coverage.

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Author Details

Heather Bien

Heather Bien is a writer covering personal finance and budgeting and how those relate to life, travel, entertaining, and more. With bylines that include The Spruce, Apartment Therapy, and mindbodygreen, she's covered everything from tax tips for freelancers to budgeting hacks to how to get the highest ROI out of your home renovations.