Debunking Common Homeowners Insurance Myths in Seacoast Maine and New Hampshire

Homeowners insurance often doesn’t get much thought until it’s needed. Knowing the truth about your policy can save you from unwelcome surprises down the road, whether it’s a tree falling on your roof or a plumbing disaster flooding your basement. Here in Seacoast Maine and New Hampshire, it's essential to understand what's covered by your policy. Let’s clear up some common myths so you can make the best decisions for protecting your home.

Myth #1: Homeowners Insurance Covers Everything

A common misconception is that homeowners insurance covers every type of damage or disaster. While policies do offer broad protection, they also have exclusions. In Seacoast Maine and New Hampshire, for example, standard policies typically don’t cover:

• Flood damage. You’ll need a separate flood insurance policy from the National Flood Insurance Program (NFIP) or a private insurer.
• Earthquake damage. Offers are usually add-ons or separate policies and aren't part of standard coverage.
• General wear and tear or maintenance issues. Insurance won’t cover damages from normal aging or neglect.
• Sewer backups. Not typically covered, though many insurers sell riders for additional protection.

Read and understand your policy before assuming you're protected.

Myth #2: My Home is Insured for Its Market Value

Many people think their insurance should match their home's market value. But really, insurance is based on the cost to rebuild. Market value includes factors like land and location, which are irrelevant to insurance. Make sure to review your policy periodically to account for changing construction costs common in Seacoast Maine and New Hampshire.

Myth #3: If Someone Gets Hurt on My Property, It’s Always Covered

Liability coverage protects you if someone is injured on your property, but there are exceptions. If the injury is from neglect, like an ignored shaky deck railing, you could be sued beyond your policy limits. Plus, if you're running a business from home, your standard policy may not cover client injuries.

Myth #4: My Policy Covers My Valuables Fully

Most policies have coverage limits for high-dollar items like jewelry, artwork, and electronics. These often include per-item or category caps, which might be lower than your valuables' worth. To fully cover high-value items, add a scheduled personal property endorsement or rider. This gives broader protection and covers items at their full appraised value. Regularly review your policy and inventory to ensure everything valuable is accounted for.

Myth #5: I Don’t Need Additional Insurance Because I Work from Home

More people in Seacoast Maine and New Hampshire work from home now than ever. A standard homeowners policy often offers limited coverage for business property but has restrictions. Limitations might affect reimbursement for your work equipment and might not cover employer-owned gear. Also, there's usually no business liability protection.

Key Coverage Gaps:

• Limited coverage for work equipment. Your policy may only reimburse up to a certain amount and might not cover employer-owned equipment at all.
• No business liability protection. If a client, customer, or delivery person is injured on your property, you could be personally responsible.
• Business inventory may not be covered. If you store products or materials at home, your standard policy likely won’t protect against theft, fire, or other damage.

How to Stay Protected:

To make sure you’re fully covered in this scenario, you can consider the following options and decide which is right for you:

• Home-based business policy. Offers broader protection for business property and liability.
• Business property endorsement. Increases coverage limits for work-related equipment.
• Commercial liability coverage. Protects against lawsuits if someone is injured while visiting for business purposes.

If you work from home, check with your insurer to ensure you have the right coverage—before an unexpected loss occurs.

Myth #6: Homeowners Insurance Covers Mold and Termite Damage

Mold and pest damages are generally seen as maintenance issues, not insurable events. Coverage can kick in if mold results from a covered peril, like water damage from a burst pipe. But for mold due to long-term humidity or leaks, you're probably on your own.

Myth #7: If My Neighbor’s Tree Falls on My House, They Pay for It

This one surprises a lot of people. In most cases, your insurance covers damage to your property, regardless of where the tree came from. However, if your neighbor was negligent—like if they knew the tree was dead and did nothing about it—you might be able to file a claim with their insurance or take legal action.

Myth #8: Filing a Claim Always Leads to Higher Premiums

This is not always true. Insurers consider many factors, like claims history, type of claim, and location when adjusting rates. A single small claim may have little impact, but frequent claims could raise your premiums. It's wise to weigh the repair costs against your deductible before filing a claim.

Final Thoughts

Homeowners insurance is a critical safeguard, but it’s not one-size-fits-all. Knowing what's covered and what’s not helps you avoid costly surprises. If you’re unsure about your coverage, sit down with your insurance agent to review your policy and make sure you’re appropriately protected.

If you have questions about homeowners insurance and its impact on real estate here in Seacoast Maine and New Hampshire, let's chat.