When it comes to protecting your biggest investment—your home—many homeowners rely on insurance for peace of mind. But despite its importance, home insurance remains widely misunderstood. These misconceptions can lead to costly mistakes and inadequate coverage when you need it most.

Let’s set the record straight by breaking down 10 of the most common myths about homeowners insurance.

1. Misconception: All damage is covered

Many people believe home insurance will cover any type of damage to their property. The truth is, most standard policies do not cover floods, earthquakes, or routine wear and tear. You may need additional riders or separate policies for these risks. Always read the fine print and ask your agent about excluded perils.

2. Misconception: Market value and replacement cost are the same

There’s a big difference between the market value of your home and what it would cost to rebuild it. Homeowner insurance is typically based on replacement cost, not what your home could sell for. That means even if the housing market fluctuates, your policy should still cover the cost to rebuild.

👉 Learn more about the right coverage for your home by visiting Homeowner insurance.

3. Misconception: Home insurance covers all your valuables

Standard policies often have limits on valuable items like jewelry, art, and collectibles. If you own high-value personal property, you may need to purchase scheduled personal property coverage to ensure full protection.

4. Misconception: Renters don’t need home insurance

If you’re renting, your landlord’s insurance doesn’t protect your personal belongings. You’ll need renter’s insurance, which is typically more affordable and covers personal property, liability, and additional living expenses if you're displaced.

5. Misconception: Claims instantly raise your premiums

While filing a claim can affect your premium, it’s not a guarantee. Factors like the type of claim, your claims history, and your insurer’s guidelines all play a role. In some cases, your premium may stay the same—especially if it’s your first claim.

6. Misconception: Mold and pest infestations are covered

Unfortunately, issues like mold, termite damage, or rodent infestations are usually considered preventable maintenance problems. Since they result from neglect over time, they’re not typically covered under a standard home insurance policy.

7. Misconception: My home business is covered

Running a business out of your home? Don’t assume your homeowner’s policy protects your business equipment or liability. In most cases, you’ll need a separate general liability insurance policy or a home-based business endorsement.

8. Misconception: I only need coverage for my house, not my land

Land is rarely covered because it typically isn’t subject to the same perils as structures. Home insurance is designed to protect the dwelling, detached structures (like garages), and your personal property—not the land itself.

9. Misconception: Flood damage is included

Standard homeowner policies do not include flood insurance. If you live in a flood-prone area, you’ll need to purchase a separate flood policy, often through the National Flood Insurance Program (NFIP) or a private carrier.

10. Misconception: I don't need to review my policy annually

Life changes—and so do your insurance needs. Whether you've renovated your kitchen, added a deck, or welcomed a new pet, it’s smart to reassess your policy every year. An annual review ensures you’re neither underinsured nor overpaying.

Final Thoughts

Being misinformed about your homeowners insurance policy can lead to serious gaps in protection. Whether you’re a new homeowner or have had a policy for years, it pays to review your coverage and ask questions.

For more helpful resources and additional coverage options like umbrella or liability policies, you can explore the official website and get expert guidance.

Protect your home the right way—starting with knowledge.
Don’t let misconceptions cost you more than you can afford.