There are many NJ homeowners insurance myths and misconceptions that will confuse you. Knowing what’s what in home insurance is a must if you own a home.
A home is likely to be the most expensive thing you’ll ever buy. Having the right insurance policy so you understand what you’re paying for is imperative.
Below, we’ll discuss the top New Jersey homeowners insurance myths and misconceptions to know:
Watch our video summary:
Myth 1: Your Coverage Limit Should Match the Value of Your Home
Many homeowners think they have to base their coverage on their home’s current market value. This is not true.
Your purchase price can be more or less than what it would cost to rebuild your home if a loss occurs. You’ll need enough insurance to cover a rebuild and more if possible.
Myth 2: Home Insurance is a Waste of Money
Home insurance is important if you want to protect the investment you made in your home. Imagine how much it would cost you to rebuild your home, or repair it in case of an emergency.
You might think of it as an unnecessary expense now, but you’ll wish you had it later on down the line if/when something happens. It can help you if there is a fire, burglary, hailstorm or different disaster.
Myth 3: Your Business is Covered By Your Policy
If you have a home-based business, you’ll need a different policy. Many home insurance policies exclude business liabilities.
You should purchase business insurance that includes property and liability coverage instead, such as a business owners policy. These types of policies are best suited for small- and medium-sized businesses.
They also include business interruption insurance, so if something happens and you need to pause your business for a while, you’ll have coverage.
Myth 4: When You’re on Vacation Your Home is Covered
If you hop on an airplane taking no prior precautions to protect your property, you might not be covered.
To ensure heating system maintenance while you are away, you should take steps such as turning off your home’s water supply and emptying the pipes.
If you don’t do this, it’s unlikely you’ll have coverage against frozen pipes bursting.
Policies vary, and depending on the length of your vacation, you may want to protect your insurance policy by having somebody visit your home while you’re away.
However, you will need to double-check the recommended frequency with your insurance provider to be sure.
Myth 5: All Belongings Receive Coverage
NJ homeowners insurance is supposed to protect your belongings.
However, you must review your policy with a fine-toothed comb to ensure that you know what is covered and what isn’t.
You may have to make add-ons to your policy for certain items.
Myth 6: There’s No Need to Make an Inventory List
Making an inventory list of your possessions is a smart thing to do.
It’s proof of your homeownership in case you must file a claim.
You’ll prepare a list of everything lost, and it helps to have this done in advance.
Myth 7: Flood Damage to Your Home Will be Covered
Sometimes water damage is covered, but flooding likely won’t be. You will need a flood insurance policy separate from your usual policy.
You can get a flood insurance policy at several places, so you should explore your options before deciding.
Myth 8: Jewelry and Family Heirlooms are Covered
As we touched on earlier, all of your items won’t have coverage, and you may need to add them to your home insurance policy.
Depending on your needs, you can either purchase an endorsement or rider to add to your policy or raise the limit.
This may be a good option for people who want to protect jewelry, artwork, and silverware.
Myth 9: Injuries that Occur in Your Home Will be Covered
This all depends on who was injured in your home. If it is a family member who also lives within your home, you wouldn’t file a claim under your home insurance. This would go through your health insurance.
However, if a guest suffers an injury, liability protection comes into play. You’ll be protected from lawsuits up to the liability limit of your policy.
Myth 10: It Replaces Your Belongings Like New
This all depends on how your belongings are insured.
If you insure them for their actual cash value, the New Jersey insurance company will reimburse you for the value at the time of the loss.
This can mean getting the depreciated value of your belongings, which might not be enough to replace them at what they cost today.
Myth 11: Your Policy Will Cover Damage Caused by Termites
Termite infestation is excluded from a standard New Jersey homeowners insurance policy. Insurers are leaving it up to you to maintain your home well enough to keep infestation and similar issues at bay.
They will blame your infestation on a lack of proper maintenance. Make sure your home is regularly inspected for termites, and work with a pest control company to eliminate the issue completely.
If you don’t, it will become a very expensive problem that can damage the structure of your property.
Key Takeaways
When debunking the top myths and misconceptions surrounding New Jersey homeowners insurance, it’s clear that informed decision-making is key to securing adequate coverage.
By understanding the nuances of policy terms, coverage options, and factors influencing premiums, homeowners can ensure they are adequately protected against unforeseen events.
Don’t let myths dictate your insurance decisions; instead, rely on accurate information and professional guidance to protect your home and belongings effectively.