Top 3 Common Misconceptions of Homeowners Insurance

As a homeowner of 10, 20, 30 years, many of my clients have shared what they believed to be true about their home insurance policies. Sometimes they were right...often they were right. My clients are high net worth individuals, informed on their policies and knowledgeable about their investments. However, there have been times when new clients come to us with pre-existing ideas about their insurance - ideas that have real life impacts on their home and family.?

I spent some time thinking through 3 of the common misconceptions homeowners have about their current insurance policy. I highlight them here and encourage you to review your own policy to ensure you and your family are covered. My hope is that this is a resource for you and your family to avoid the stress caused by a homeowners insurance policy that does not do what it should.?

1?? Home renovations are covered under my current insurance policy

A new swimming pool? An outdoor kitchen installation? Adding a second story suite? Home renovations that are minor like painting a bedroom or updating carpet are unlikely to be impacted by your insurance policy. However, larger home renovations that change either the value or liability of your current coverage will impact your coverage.?

It is critical to understand your current coverage and discuss home renovation projects with your agent prior to starting major remodels of your home. If you have recently completed a home project (or are in the middle of one), it is not too late to call and ensure that your renovation is properly covered with your current policy.?

2?? My roof will be replaced when it is damaged

Yes. Sort of. It depends on your coverage. If you have replacement cost coverage, then your policy will cover the full replacement cost of your roof.? Texas Department of Insurance put out a good resource on this a couple years ago sharing what to look for in your coverage to understand what is covered. Understanding the cost of replacement versus replacing the cost of the roof is important…and no, these are not always the same. Replacing the cost takes into account the age and condition of your roof when assessing coverage amounts. The cause of the roof damage is important for you to know about your insurance policy.?

In Texas, you may need to have additional wind and hail damage coverage in order to replace your roof as a result of hail. Some policies also have expiration dates for this type of damage, so getting roofs inspected soon after a storm allows you time to shop for the best company to replace your roof.?

While we are on the topic, I could spend an entire paragraph talking about roofers. I know some of the best in the business that are our referral partners of C1 Insurance Group like Jess Marshall and I also know some scammers that have taken my clients to the cleaners. It is more difficult to be hired to cut hair in Texas than it is to be hired to put a roof on your home, so buyer beware.?

3?? My personal belongings are covered by homeowners insurance

Your personal belongings are often covered by your homeowners insurance…up to a certain amount. I have found for our high net worth clients, the amount covered by a standard insurance policy is not sufficient to account for the potential replacement of furniture, jewelry, and other items in the home.?

Read through and understand your policy in order to know if you need additional coverage. If you do, this can be written into an insurance policy or it might be wiser to consider personal property coverage if your belongings inside the home warrant a policy separate from your homeowners insurance.?

As the insurance industry evolves with changes in protection and policies, it is critical for homeowners to consider how best to protect their families. It can be heartbreaking to learn that a family thought they were paying for coverage that their policy did not include. As always, the best way to stay informed is to ensure that you are checking the source of your coverage (your policy paperwork, your agent, or your carrier) and trusting reliable sources to help you understand your benefits under your homeowners insurance policy.?

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