Homeowners insurance is one of the most important protections you can have—yet it’s also one of the most misunderstood. Many homeowners assume their policy covers more (or less) than it actually does, which can lead to unpleasant surprises during a claim.
Whether you're buying your first home or have had a policy for years, it’s time to separate fact from fiction and get the clarity you need to protect your home—and your finances.
What Is Homeowners Insurance?
Homeowners insurance is a policy that helps pay for repairs, rebuilding, or replacement if your home or belongings are damaged due to covered events (called “perils”), such as:
- Fire or smoke
- Windstorms or hail
- Theft or vandalism
- Water damage from burst pipes
- Liability if someone is injured on your property
It also provides loss of use coverage, helping you pay for temporary living expenses if your home is uninhabitable after a covered event.
Common Home Insurance Myths—Busted
Let’s explore the most common misconceptions and set the record straight.
Myth #1: “Flood Damage Is Always Covered”
Fiction.
Standard homeowners insurance does NOT cover flood damage caused by rising water or heavy rain. You’ll need to purchase separate flood insurance, usually through the National Flood Insurance Program (NFIP).
Fact: Water damage from a burst pipe or appliance is typically covered, but groundwater and flooding are not.
Myth #2: “I Only Need Enough Coverage for My Home’s Market Value”
Fiction.
Your insurance should be based on the rebuild cost, not the market value. Land doesn’t burn—but materials and labor costs can be high.
Fact: Insurers use a “replacement cost estimator” to calculate how much it would cost to fully rebuild your home.
Myth #3: “My Policy Covers All My Valuables”
Fiction.
Standard policies have limits on high-value items like jewelry, art, or collectibles. For full protection, you’ll need to “schedule” these items or add a rider.
Fact: Jewelry coverage may be capped at $1,000–$2,500 unless you add specific coverage.
Myth #4: “If I’m Not at Fault, I Don’t Need to File a Claim”
Fiction.
Even if a neighbor’s tree falls on your house, your insurance may still be responsible for the repair. Fault doesn’t always determine responsibility in claims.
Fact: Your homeowners policy will typically cover damage regardless of fault—but your insurer may pursue reimbursement from the liable party.
Myth #5: “Mold and Termite Damage Are Always Covered”
Fiction.
Most policies exclude damage from neglect or long-term issues like mold, pests, or gradual wear and tear.
Fact: Mold may be covered if it results from a covered peril (like water from a burst pipe), but not if it's due to poor maintenance.
What Home Insurance Actually Covers
Here’s a quick overview of what’s typically included in a standard policy (HO-3):
- Dwelling Coverage – Rebuild or repair your home structure
- Other Structures – Garages, sheds, fences, etc.
- Personal Property – Furniture, appliances, clothing, electronics
- Loss of Use – Hotel and meal expenses if you can’t live in your home temporarily
- Liability Protection – Covers legal costs if someone is injured on your property
- Medical Payments to Others – Small medical bills (regardless of fault)
What’s Not Covered (Without Add-Ons)
You may need extra endorsements or separate policies for:
- Floods
- Earthquakes
- Sewer backup
- Equipment breakdown
- High-value personal property
- Home-based business equipment
Pro Tip: Always ask your agent to review your policy limits and exclusions annually—especially if you’ve renovated or made major purchases.
Final Thoughts: Know Your Coverage Before You Need It
Understanding what your homeowners insurance actually covers (and what it doesn’t) is essential for protecting your investment and avoiding costly surprises. Don’t wait until disaster strikes to find out what’s included in your policy.
Bottom Line: Home insurance isn’t just paperwork—it’s your financial safety net. Separate the myths from reality so you can make smart, informed decisions.
At Freedom Insurance Group, Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get additional information about our products and services by calling our agency at 828-322-7474. Get a free quote today by CLICKING HERE.
Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.