Many homeowners misunderstand how their insurance coverage works, leading to frustration and unexpected claim denials. These misunderstandings often stem from assumptions rather than a careful reading of the policy.
One common misconception is that homeowners insurance covers all types of damage. In reality, policies cover only specific perils and exclude others such as flooding or wear and tear.
Another misunderstanding is assuming personal property coverage applies equally to all items. Sub-limits often apply, reducing payouts for certain valuables.
Some homeowners believe liability coverage applies only on their property. In many cases, liability coverage can extend beyond the home, but limits still apply.
Others assume insurance pays the full cost of repairs regardless of policy limits or deductibles. In practice, limits and deductibles significantly affect final payouts.
Understanding these common misunderstandings helps homeowners set realistic expectations and avoid coverage gaps.
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