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For many people, their house is their largest financial investment. Having a reliable home insurance policy ensures you are protected in a variety of situations. However, there are a few myths about what a standard policy covers. Here, the team at Western States Insurance Group in Lovington, NM, clarifies some of the most common misconceptions about coverage.

Top Home Insurance Myths

1. Home Insurance Covers Natural Flooding Disasters

Most policies do not cover flooding caused by heavy rainfall or overflowing rivers. Homeowners will need a separate flood insurance plan to file claims for damage due to these perils. The good news is that a standard home insurance policy covers flooding caused by household incidents like burst plumbing pipes and malfunctioning appliances.

2. Insurance Will Pay My Home's Market Value

Standard home insurance policies pay to rebuild or replace houses after a disaster like a fire, and homeowners can choose how they want to cover their investment. The replacement cost is based on a contractor’s estimate of what it would take to build an identical dwelling. This figure includes features and upgrades you may have added. The market value is based on what a new buyer would expect to pay for your property in its current condition. However, this is influenced by external factors that might mean the house is worth less than when you bought it.

3. Policies Only Cover Houses

home insurance Lovington NMNot only do home insurance policies cover the primary dwelling, but they also protect what’s inside, including furniture, appliances, and electronics. Carriers will either reimburse you for the actual cash value of damaged items, which reflects market factors like demand and age, or the replacement cost, which is based on the retail price at the time of the claim. Most policies also cover structures like garages, guest houses, and workshops on the property.

4. I’m Still Covered If Damage Occurs While I’m Away

This is true in most cases. For example, if a pipe bursts while you’re on vacation, your policy will most likely pay for the cleanup. However, some providers require homeowners to take precautionary steps such as turning off the water supply and heating and air conditioning systems as a condition of claim approval.

5. I Don’t Need Home Insurance

Mortgage lenders typically require homebuyers to purchase insurance. Since the bank or financial entity technically owns the house until the loan is paid off, they want to protect their investment from any potential damage. Most lenders will request written proof of coverage at closing.

You put a great deal of time, money, and effort into becoming a homeowner. Let the agents at Western States Insurance Group help secure your financial investment with reliable home insurance. To request a free, no-obligation price quote or review your current policy, call (575) 396-1318 and select extension 1 for Stella Fernandez, our home specialist. Visit our website for information about additional insurance products, including life, health and auto insurance.

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