72% Of Homeowners Don’t Understand Essential Home Insurance Coverage
When it comes to choosing a home insurance policy, there are several different features to consider. Some homeowners need to choose a higher policy limit while others only need lower deductibles. You can choose your policy limits according to your needs, but if you're buying a new home, you should opt for higher policy limits and higher deductibles to avoid major financial setbacks. Homeowners should also consider adding additional living expenses coverage if they plan to move away from their home during a catastrophe.
Another important feature of home insurance is liability cover. It protects policyholders from liability if something happens to their home that damages another person's property. For example, if a tree falls on a neighbor's fence and damages their property, the policyholder will be covered for damages. The insurance company will also pay for any repairs needed to make the property safe and secure, as well as cover any legal costs. This is the type of policy you need for your home.
Personal Property: Most home insurance policies cover the building and any additional structures around it. This includes any electrical appliances, television sets, refrigerators, microwaves, air-conditioners, furniture, etc. In some cases, the policy will cover valuable assets such as jewelry. Personal possessions are covered up to a certain amount, and some insurers have a limit that is higher than others. You should check the limits and add-ons before you buy a policy.
If you want to protect the investment you've made in your home—as well as your financial assets against future lawsuits—you'll need homeowner's insurance. However, according to a new Forbes Advisor poll of 2,000 homeowners, the majority of them have no idea how home insurance works, despite the fact that they are paying more for it than they were a year ago.
Another important feature of home insurance is liability cover. It protects policyholders from liability if something happens to their home that damages another person's property. For example, if a tree falls on a neighbor's fence and damages their property, the policyholder will be covered for damages. The insurance company will also pay for any repairs needed to make the property safe and secure, as well as cover any legal costs. This is the type of policy you need for your home.
Personal Property: Most home insurance policies cover the building and any additional structures around it. This includes any electrical appliances, television sets, refrigerators, microwaves, air-conditioners, furniture, etc. In some cases, the policy will cover valuable assets such as jewelry. Personal possessions are covered up to a certain amount, and some insurers have a limit that is higher than others. You should check the limits and add-ons before you buy a policy.
If you want to protect the investment you've made in your home—as well as your financial assets against future lawsuits—you'll need homeowner's insurance. However, according to a new Forbes Advisor poll of 2,000 homeowners, the majority of them have no idea how home insurance works, despite the fact that they are paying more for it than they were a year ago.
The majority of homeowners are unaware of the importance of liability insurance.
The majority of homeowners are unaware that their home insurance policy covers more than simply their property and personal belongings: Liability insurance is misunderstood by 72% of homeowners. However, liability insurance, which is included in most house insurance policies, is critical financial protection in the event of unintentional injuries or property damage to others.
For example, if your child (or someone in your household) kicks a soccer ball through your neighbor's patio door, your liability insurance may cover the cost of the repair. However, slightly more than half of homeowners (51%) believe their problem will not be covered by home insurance, while 21% are unsure.
Do you think your homeowner's insurance will cover repair costs if your youngster kicks a ball through your neighbor's patio door by accident?
Insurance for Dog Bite Incidents is Misunderstood
Homeowners were also questioned if their home insurance would cover medical fees if their poodle bit someone. Although the answer is affirmative, many homeowners (39 percent) either don't know or don't care (18 percent ).
Only 44% of respondents were aware that dog bites are covered by homeowner's insurance. (Some house insurance providers have a banned dog breed list, which means that if you own a dog on the list, you won't be covered for dog bites.) Pit bulls, Rottweilers, and Doberman Pinschers are regularly seen on banned breed listings.)
Home Insurance for Vehicle Damage: Is It Worth It?
The majority of homeowners (71 percent) are unaware that home insurance does not cover automobile damage. For example, if a house fire burns down your garage, your home insurance will not cover the car. If you have comprehensive car insurance, it will cover the cost of repair or replacement. However, 40% feel that homeowners insurance would cover them.
Many homeowners believe they have coverage when they don't. Fires, smoke, tornadoes, vandalism, fallen items, burst pipes, and other difficulties are all covered by home insurance. When asked to identify what is covered by home insurance, however, the poll discovered that many homeowners had a misunderstanding about what is eligible for a claim:
Earthquake damage is not covered by a normal home insurance policy, according to 40% of homeowners.
Home insurance does not cover flood damage, despite the fact that 36% of homeowners believe it does.
Mistakes like these can be incredibly costly. When homeowners mistakenly believe they are covered, they are less likely to seek out the appropriate insurance.
According to the poll, some homeowners in natural disaster-prone areas may believe they have coverage when they actually don't. That might be a very expensive blunder. Consider the following scenario:
Home insurance does not cover earthquakes, according to 33% of homeowners in the West.
In the southeast, 36% of homeowners believe their home insurance covers flood damage.
Flood damage necessitates a separate flood insurance coverage for homeowners. In addition, earthquake damage would need the purchase of an earthquake insurance coverage.
Homeowners who are unaware that they are already covered
On the other hand, there are certain misconceptions regarding what is typically covered by a standard homes insurance policy. If you don't realize you're covered, you're unlikely to file a claim:
A surprising number of homeowners (19%) were unaware that home insurance covers damage from a kitchen fire, which is one of the most common causes of house fires.
Only 39% of homeowners were aware that their homeowners' insurance covers wildfire damage. There's no need to purchase a separate wildfire insurance coverage.
Only 59 percent of respondents were aware that their homeowners' insurance covers tornado damage.
Many homeowners are unaware of how home insurance rates are determined.
Homeowners have a common misunderstanding that their home insurance rates are influenced by the value of their land (51%), as well as the market worth of their home (46%). Land and market value, on the other hand, have no bearing on the cost of homeowners insurance.
The cost of rebuilding a home, coverage limitations, your personal claims history, and other factors all go into determining your home insurance rates.
What do you think influences your house insurance rates?
Nearly half of homeowners saw their rates rise. Recently
While the rising cost of petrol and food receives a lot of attention, many homeowners have certainly seen an increase in their house insurance premium. According to the poll, nearly half of households (46%) feel their homes insurance costs have increased since May 2021.
Only 5% of homeowners believe their house insurance prices have decreased in the last year, while 38% say their premium has remained unchanged.
The majority of respondents who said their house insurance rates increased experienced an increase of up to $250 per year, while 30% observed an increase of between $251 and $750 per year. And, according to 9 percent of homeowners, their home insurance premiums have increased by more than $1,000 per year, indicating that now is a good time to compare homeowners insurance quotes for a new policy.
The majority of homeowners are unaware that their home insurance policy covers more than simply their property and personal belongings: Liability insurance is misunderstood by 72% of homeowners. However, liability insurance, which is included in most house insurance policies, is critical financial protection in the event of unintentional injuries or property damage to others.
For example, if your child (or someone in your household) kicks a soccer ball through your neighbor's patio door, your liability insurance may cover the cost of the repair. However, slightly more than half of homeowners (51%) believe their problem will not be covered by home insurance, while 21% are unsure.
Do you think your homeowner's insurance will cover repair costs if your youngster kicks a ball through your neighbor's patio door by accident?
Insurance for Dog Bite Incidents is Misunderstood
Homeowners were also questioned if their home insurance would cover medical fees if their poodle bit someone. Although the answer is affirmative, many homeowners (39 percent) either don't know or don't care (18 percent ).
Only 44% of respondents were aware that dog bites are covered by homeowner's insurance. (Some house insurance providers have a banned dog breed list, which means that if you own a dog on the list, you won't be covered for dog bites.) Pit bulls, Rottweilers, and Doberman Pinschers are regularly seen on banned breed listings.)
Home Insurance for Vehicle Damage: Is It Worth It?
The majority of homeowners (71 percent) are unaware that home insurance does not cover automobile damage. For example, if a house fire burns down your garage, your home insurance will not cover the car. If you have comprehensive car insurance, it will cover the cost of repair or replacement. However, 40% feel that homeowners insurance would cover them.
Many homeowners believe they have coverage when they don't. Fires, smoke, tornadoes, vandalism, fallen items, burst pipes, and other difficulties are all covered by home insurance. When asked to identify what is covered by home insurance, however, the poll discovered that many homeowners had a misunderstanding about what is eligible for a claim:
Earthquake damage is not covered by a normal home insurance policy, according to 40% of homeowners.
Home insurance does not cover flood damage, despite the fact that 36% of homeowners believe it does.
Mistakes like these can be incredibly costly. When homeowners mistakenly believe they are covered, they are less likely to seek out the appropriate insurance.
According to the poll, some homeowners in natural disaster-prone areas may believe they have coverage when they actually don't. That might be a very expensive blunder. Consider the following scenario:
Home insurance does not cover earthquakes, according to 33% of homeowners in the West.
In the southeast, 36% of homeowners believe their home insurance covers flood damage.
Flood damage necessitates a separate flood insurance coverage for homeowners. In addition, earthquake damage would need the purchase of an earthquake insurance coverage.
Homeowners who are unaware that they are already covered
On the other hand, there are certain misconceptions regarding what is typically covered by a standard homes insurance policy. If you don't realize you're covered, you're unlikely to file a claim:
A surprising number of homeowners (19%) were unaware that home insurance covers damage from a kitchen fire, which is one of the most common causes of house fires.
Only 39% of homeowners were aware that their homeowners' insurance covers wildfire damage. There's no need to purchase a separate wildfire insurance coverage.
Only 59 percent of respondents were aware that their homeowners' insurance covers tornado damage.
Many homeowners are unaware of how home insurance rates are determined.
Homeowners have a common misunderstanding that their home insurance rates are influenced by the value of their land (51%), as well as the market worth of their home (46%). Land and market value, on the other hand, have no bearing on the cost of homeowners insurance.
The cost of rebuilding a home, coverage limitations, your personal claims history, and other factors all go into determining your home insurance rates.
What do you think influences your house insurance rates?
Nearly half of homeowners saw their rates rise. Recently
While the rising cost of petrol and food receives a lot of attention, many homeowners have certainly seen an increase in their house insurance premium. According to the poll, nearly half of households (46%) feel their homes insurance costs have increased since May 2021.
Only 5% of homeowners believe their house insurance prices have decreased in the last year, while 38% say their premium has remained unchanged.
The majority of respondents who said their house insurance rates increased experienced an increase of up to $250 per year, while 30% observed an increase of between $251 and $750 per year. And, according to 9 percent of homeowners, their home insurance premiums have increased by more than $1,000 per year, indicating that now is a good time to compare homeowners insurance quotes for a new policy.
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