Debunking Homeowners Insurance Myths in Sheboygan County

Homeowners insurance often falls into the category of things people don’t think about until they need it. The problem is, by the time you’re facing an emergency—a tree crashing through the roof, a burst pipe flooding your basement, or worse—it’s too late to question assumptions about your policy that might not be true. Let's get to the bottom of some common homeowners insurance myths to help you make informed decisions about protecting your home in Sheboygan County.

Myth #1: Homeowners Insurance Covers Everything

One common misconception is that homeowners insurance covers every type of damage or disaster. While many policies provide broad protection, there are notable exclusions. For instance, standard policies typically don’t cover:

• Flood damage. Sheboygan County residents should consider separate flood insurance through the National Flood Insurance Program (NFIP) or private insurers.
• Earthquake damage. Coverage is available as an add-on or separate policy, depending on your insurer.
• General wear and tear. Insurance addresses sudden and accidental damage but not neglect or aging.
• Sewer backups. Standard policies usually do not cover sewer or drain backups, but you can add a rider for extra protection.

Make sure to read your policy thoroughly and understand what’s included and what’s excluded.

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

Another myth is that your home should be insured for its market value. In reality, insurance is based on the cost to rebuild your home, not what it would sell for. Market value considers factors like land and location, while replacement cost focuses on materials and labor to reconstruct the home. Construction costs can fluctuate, so periodically reviewing your policy is essential to ensure adequate coverage.

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

Liability coverage in a homeowners insurance policy does offer protection if someone gets injured on your property. However, there are exceptions. If the injury is due to negligence on your part—like ignoring a rotting deck railing—you could be sued for damages beyond your policy limits. Additionally, if you run a business from home and a client gets injured, that may not be covered by your standard policy.

Myth #4: My Policy Covers My Valuables Fully

Most homeowners policies have limits for high-value items like jewelry, artwork, collectibles, high-end electronics, and firearms. While there is some protection, it typically comes with per-item or category caps. This means your policy might only reimburse a fraction of the worth of these items if they are lost, stolen, or damaged.

If you own high-value items, consider adding a scheduled personal property endorsement to specifically insure them for their full appraised value. This can extend coverage to include accidental loss or damage, which is often excluded from standard policies. Reviewing your policy periodically and maintaining an updated inventory can help ensure you’re well-protected.

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

With more people working remotely, there is a misconception that standard homeowners insurance covers work-related equipment and activities. However, standard policies have limitations on business property coverage.

Key Coverage Gaps:

• Limited coverage for work equipment, with restrictions on reimbursement.
• No business liability protection for injuries occurring during work-related activities.
• Business inventory is typically not covered against theft, fire, or other damage.

To fill these gaps, consider options such as home-based business policies, business property endorsements, or commercial liability coverage. Check with your insurer to ensure you have the right coverage for your work-from-home needs.

Myth #6: Homeowners Insurance Covers Mold and Termite Damage

Mold and pest damage are generally considered preventable maintenance issues rather than sudden and accidental damage. Thus, most policies don’t cover them. If mold results from a covered peril—such as water damage from a burst pipe—your policy might help with remediation. However, mold from long-term issues like high humidity or unaddressed leaks is usually not covered.

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

Many people are surprised to learn that if a neighbor’s tree falls on your property, your insurance pays for the damage. However, if the neighbor was negligent—knowing the tree was dead and failing to act—you might be able to claim against their insurance or take legal action.

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

This isn’t necessarily true. Insurance companies consider several factors when adjusting rates, including your claims history, the type of claim, and your location. A single small claim might not impact your premium much. However, frequent claims or a history of high payouts could increase your rates. Consider the repair cost against your deductible before filing a claim.

Final Thoughts

Homeowners insurance is a vital safeguard, but it’s not a one-size-fits-all policy. Understanding your coverage can help you avoid costly surprises. If you’re unsure about your policy, review it with your insurance agent to ensure you have the right protection in place. Have questions about homeowners insurance in Sheboygan County and how it affects your real estate decisions? Let’s have a conversation.