07/22/2026
There are quite a few myths about homeowners insurance that can lead to unpleasant surprises at claim time. As a consumer, these are things you should know and be discussing with your agent.
1. “My home is insured for its market value.”
* Homeowners insurance is typically based on the cost to rebuild the home, not its market value or purchase price. Land value, location, and housing market trends don’t directly determine the dwelling limit.
2. “Everything I own is covered automatically.”
* Personal property is covered, but many high-value items have special limits. Jewelry, fi****ms, collectibles, artwork, and business equipment often require scheduled endorsements for full protection.
3. “Flood damage is covered.”
* Standard homeowners policies do not cover flood damage from rising water. Separate flood insurance is typically required.
4. “If my roof is damaged, insurance will pay for a brand-new roof.”
* Coverage depends on the cause of loss, the policy language, and whether the roof is insured for replacement cost or actual cash value. Age and wear can affect the settlement.
5. “Homeowners insurance covers maintenance issues.”
* Insurance is designed for sudden and accidental losses, not wear and tear, deterioration, mold caused by neglect, or deferred maintenance.
8. “If a pipe leaks, all water damage is covered.”
* Sudden, accidental pipe bursts are often covered, but long-term leaks, seepage, or neglected plumbing issues are typically excluded.
9. My policy covers my home-based business.”
* Most homeowners policies provide very limited coverage for business property and liability. A home business endorsement or commercial policy may be needed.
10. “My liability coverage only protects me at home.”
* Personal liability coverage often follows you beyond your property. For example, it may respond if you accidentally injure someone or damage their property away from home, subject to policy terms and exclusions.
11. “If someone gets hurt on my property, insurance automatically pays.”
* Liability coverage generally applies when you’re legally responsible for an injury. Every claim is investigated based on the facts and policy language.
12. “Replacement cost means I get whatever it costs, no matter what.”
* Replacement cost coverage is still subject to policy conditions, limits, deductibles, and sometimes requirements to actually repair or replace the damaged property.
13. “My policy covers sewer backups.”
* Water backing up through sewers or drains is usually not covered unless you’ve purchased a water backup endorsement.
14. “Insurance covers any damage caused by trees.”
* If a healthy tree falls due to a covered peril like a windstorm, the damage is often covered. If the tree was dead or poorly maintained, coverage may be limited or denied.
15. “I never need to review my policy.”
* Home renovations, major purchases, rising construction costs, and life changes can all affect whether your coverage remains adequate.
