Home insurance feels simple until a disaster hits and the biggest myths about home insurance start costing homeowners real money. Most gaps do not come from fine print. They come from assumptions. If you believe any of the biggest myths about home insurance, you are already carrying risks you cannot see and costs you will not expect.
Myth 1: “Home insurance covers everything that goes wrong.”
It does not. Policies only cover specific insured events such as fire, theft, and certain storm damage. Anything gradual, preventable, or maintenance related is usually excluded. Flood, accidental damage, mould, subsidence, and electrical faults often require separate cover. Assuming everything is covered is why legitimate claims get denied.
What this costs you: Repair bills you thought were insured end up fully out of pocket.
Fix it: Read the list of insured events and exclusions, not the sales headline.
Myth 2: “Insuring for market value is enough.”
It is not. Market value includes land. Rebuild cost does not. Land does not burn or flood. Construction does. With building inflation rising more than 35 percent since 2022, insuring for purchase price almost guarantees underinsurance.
What this costs you: A rebuild gap that can easily exceed one hundred thousand dollars.
Fix it: Insure for replacement cost, not what the home would sell for.
Myth 3: “The cheapest policy is just as good.”
Cheap premiums usually mean stripped back coverage. This includes lower sub limits, tougher exclusions, no flood cover, limited temporary accommodation, weak accidental damage rules, and strict cash settlement terms. The difference only becomes clear on claim day when you need the policy to work.
What this costs you: Reduced payouts or denied claims when you need support most.
Fix it: Compare coverage quality, not price.
Myth 4: “Storm cover includes flood. Water is water.”
Storm, rainwater runoff, and flood are separate events with separate definitions. Flood cover is often optional. Mixing these up is one of the most common reasons flood claims are rejected.
What this costs you: A total denial of a claim you believed was valid.
Fix it: Check if flood is included, excluded, or requires an add on.
Myth 5: “Being slightly underinsured is fine. The insurer will top up the rest.”
Underinsurance often triggers proportional payout rules. If you insure only 70 percent of the rebuild value, you may receive only 70 percent of any major claim, even partial losses.
What this costs you: Large unrecoverable shortfalls during major repairs.
Fix it: Recalculate rebuild and contents values at least once a year.
Myth 6: “Cash settlements are always better.”
Cash settlements often reflect what it costs the insurer, not what it costs you. After disasters, trades, materials, and labour become scarce. The cash offer may fall well short of the real cost to rebuild or repair.
What this costs you: A payout too small to restore your home.
Fix it: Only take cash when the repair is simple or you have independent quotes.
Myth 7: “Renters do not need insurance. The landlord’s policy covers everything.”
Landlord insurance covers the building and the landlord’s fixtures. It does not cover the tenant’s possessions. After disasters, renters without contents cover receive nothing for their belongings.
What this costs you: The full replacement cost of furniture, clothing, electronics, and appliances.
Fix it: Renters need contents insurance and an inventory.
Myth 8: “My insurer automatically keeps my cover up to date.”
Indexation increases cover slightly each year. It does not account for renovations, new appliances, improved finishes, or updated building codes. Your cover falls behind quietly every year.
What this costs you: A slow slide into underinsurance that only becomes visible after a large claim.
Fix it: Update sums insured whenever you renovate or buy major assets.
The Fix: Turn Assumptions Into Evidence
Insurance failures rarely happen at claim time. They happen years earlier when assumptions replace facts. Policies protect what you can prove. Homeowners who document what they own, understand their coverage, and update values regularly recover faster and receive more accurate payouts.
myVal brings structure to that process.
- Digital inventories
- Policy Health Checks
- Flood, storm, and fire coverage analysis
- Claim ready evidence packs
- Maintenance alerts based on insurer expectations
Myths disappear when evidence replaces assumptions. Preparation is control, not fear.
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