Home Insurance Myths That Cost Unknowing Homeowners

LOS ANGELES - Jan. 16, 2025 - PRLog -- Myth #1: Flood and Water Damage Are Covered by Home Insurance
While certain types of water damage caused by sudden water heater leaks and burst pipes are covered by homeowners insurance, flooding caused by a storm is not. You are only covered for a flood with a separate flood insurance policy. If the source of the flood was an earthquake, you'd be covered with a flood insurance policy, not an earthquake insurance policy, which is also separate from a home insurance policy.

Myth #2: Having a Dog Won't Affect Home Insurance
Certain aggressive breeds of dogs (Rottweilers, Pit Bull Terriers, Bullmastiffs and more) are excluded in a home insurance policy and may cause an insurer to deny you coverage altogether. The reason is that homeowners insurance has a liability component to it, and if your dog bites a visitor, the medical bills are covered. The higher the risk that claims will be filed are enough reason for a company to reject you.

Myth #3: Home Insurance Only Covers Possessions in the Home
In addition to your possessions kept at a residence, a home insurance policy will also cover personal belongings in a storage facility and even items like a bicycle or laptop, if they are stolen while you're not home or if stolen from your car. This "off-premises" or "off-property" coverage of a policy covers roughly 10% of your personal property coverage maximum. If you have $100,000 in property coverage, you'll have $10,000 worth of coverage for items damaged, destroyed or stolen away from your home.

Myth #4: Home Insurance Companies Don't Look at Your Credit Score
In California, Hawaii, Maryland, Massachusetts and Michigan homeowners insurers cannot use your credit score (also called FICO score) to determine an insurance score. However, in most states they do, and it can really impact the cost of coverage. You may be paying up to 70% more in premiums due to history of unpaid bills, large debts, multiple types of credit, and the length of your credit history. To improve your credit and lower your insurance costs, pay off debts that are in collections and pay down debt. Also, stop signing up for new credit cards, because too many credit lines also negatively affect your credit score...

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