Home Insurance Myths More Persistent Than the Bigfoot Legend

Washington home insurance myths homeowners believe stick around like frying oil in a pan (and are more persistent than your resident Bigfoot) because they sound good on the surface. But the most common ones are very bad, like the idea that it covers all water damage, market value equals replacement cost — none of this is true, unfortunately! The problem is that insurance does not run on vibes. It runs on policy language, limits, exclusions, deductibles, and a whole lot of “well, that depends.” So when people treat home insurance like a magic shield, they end up shocked when a claim gets denied or paid differently than expected. That is when the fun stops and the wallet starts making haunted house noises. 

In this guide from Vern Fonk, you’ll read about the most common Washington home insurance myths and how you can avoid making the typical mistakes. Along the way, you’ll learn everything you need to know about shopping for your own customized Washington homeowners insurance quote. Let’s dive right into that pool of water that just formed in your basement! 

Why Home Insurance Myths Stick Around

The main reason these homeowners insurance myths stick around? It’s because they seem reasonable. And to most people, they’re not big leaps of faith. But the reality is that insurers are dotting their i’s and crossing their t’s, and that can lead you into some trouble. Watch out for these 10 common home insurance myths and misunderstandings! 

Myth #1: Home Insurance Covers All Water Damage

This one will not die! Water damage insurance myths stick around forever. People think “water damage” means that water is water — what could be the difference between the H2O over in that puddle in the kitchen and the H2O slamming into your rooftop after a particularly wacky thundershower? Your insurance company DOES NOT see it that way. They care how the water got in. They care how long it was there. And they want to know if it was sudden or slow-motion damage. Why? Here’s why. 

Sudden Damage vs. Gradual Damage

Let’s say a pipe bursts, or your toilet overflows, and water spills through the floor. Or maybe your washer hose snaps. All of these situations are like music to your ears (even if it doesn’t seem that way at the time): SUDDEN and ACCIDENTAL. Magic words in the world of home insurance coverage myths. But if water has been leaking for months behind the wall while everyone just kept walking past it like “huh, weird smell,” that gradual damage is usually not covered. This also goes for mold that pops up after long leaks. You’re not going to get much help there if it’s something you should have spotted early. Speaking of which, that’s why you should also check if your homeowners insurance covers plumbing. 

Flood Coverage vs. Standard Policies

Flooding is another animal entirely on the list of home insurance misconceptions. Your standard homeowners insurance won’t cover flood damage. A “flood” in this case is water from outside that flows into your home from a local body of water, or due to particularly intense flooding, even in higher elevations. You’ll need to get coverage through the National Flood Insurance Program or a private insurer that’s willing to underwrite this risk if your home turns into a submarine (actually, you need it before you go full Down Periscope). 

Myth #2: Market Value Equals Replacement Cost

Replacement cost vs market value: What gives? One of the more common insurance myths homeowners believe is that market value = replacement cost. What’s market value? That’s what someone might pay for your home today. Like if you put it on the market and set a price for it. Things like where you live, your school district, mortgage rates, etc., can all change the market value. 

Replacement cost is a bit different. The idea is: How much would it cost to rebuild your home with the same materials? Now, the key thing here is that for most policies, the insured value is based on the rebuilding cost, not what the property is worth today if someone came a-knocking. 

Myth #3: Filing One Claim Automatically Doubles Your Rates

Claims do affect your premiums sometimes. But one claim isn’t necessarily going to skyrocket your rate into the stratosphere — that’s one of those usual home insurance misunderstandings. Your insurer will definitely look at your claims history and other factors. But it’s not some kind of Looney Tunes trapdoor where you file one claim and an anvil drops out of the sky and smashes your personal financial situation. Nevertheless, it’s a good idea to be mindful of the types of claims you file. 

Myth #4: Home Insurance Covers Everything Inside Your House

What you call “everything inside your house” is actually called “personal property” by an actuary (the people who do all the fancy mathematical calculations to figure out your premium). And one of the more common is that it’s all covered, already. But this personal property coverage has what’s called a “limit.” So, for example, if you have some expensive things in your home, it may not be completely covered if a fire burns down your house or a rogue Sasquatch ransacks your home. 

High-Value Items

What does high value mean? It means things like expensive jewelry, collectibles, art — the priceless things. Family heirlooms, too, maybe. And if someone steals this property, you might not be covered. If you have expensive things, you may need them scheduled separately or covered by an endorsement or floater. 

Translation: If you own a ring that could fund a small country’s GDP, then you should ask about extra coverage. 

Business Property at Home

Let’s say you run a small business out of your home. It could be, say, a tiny studio, or maybe a repair shop out of your garage. The typical homeowners policy, according to the Insurance Information Institute, only covers up to about $2,500 in business equipment. You might need a separate business liability coverage in this situation. 

Myth #5: I Haven’t Updated My Policy and That’s Fine

Maybe it’s fine if nothing has truly changed at home. But it might not be, because if you, say, added a room or remodeled your kitchen, then you need to see if your old policy still makes sense. One of the more common home insurance misconceptions is not keeping your policy in line with your current real life. If the dwelling limit doesn’t match your rebuilding needs, that’s a problem. Make sure you talk to your agent if you give your property a glow-up or if something else changes. 

Myth #6: Earthquakes and Landslides Are Covered Automatically

Nope. Your bog-standard policy won’t cover anything that involves tectonic plates moving around and causing property damage, unfortunately. The fancy-schmancy term here is “earth movement exclusion,” which sounds a lot calmer than what actually happens during an earthquake or landslide. 

One wrinkle in this list of homeowners insurance myths is that if a landslide causes mudflow to occur, flood insurance might help you out there. In any event, talk to your agent if you think you have any chance at all of an earthquake occurring in your neck of the woods. 

Myth #7: My Detached Structures Are Fully Covered by Default

Another common home insurance coverage myth. Not unless you specify it otherwise. Detached structures are usually covered to some degree under an “other structures” coverage (gazebos, fences, sheds, garages), but that is usually only up to 10% of your dwelling coverage. If you have a lot of expensive stuff in that detached structure, you should check your limit before trouble shows up. 

Myth #8: Mold Is Always Covered

A moldy topic in the common home insurance myths library — water damage insurance myths, specifically. Mold is not always covered by homeowners insurance. That myth needs to be … kindly retired. If mold comes from sudden and accidental water damage that the policy covers, then you’re in business. If it results from not maintaining the property, it’s going to be excluded. You need to take care of your home, but your policy will likely help you out if something extraordinary happens, like a random pipe burst. Water damage insurance myths should have no place in your life and neither should mold! 

Myth #9: My Policy Covers Short-Term Rentals or Airbnb Automatically

That is not something you want to assume. If you rent your home out short-term, some insurers may allow it if they know about it, others may require an endorsement, and some may not want to insure you at all. Talk to your agent before you operate what amounts to a hotel out of your own home. 

Myth #10: Home Insurance Rates Are Completely Out of My Control

Not completely. Some things are outside your control, sure. The weather does not care about your budget. Regional repair costs do not matter either. But you can still influence price in some cases through deductible choices, bundling, discounts, security improvements, home-hardening steps, shopping around, and keeping policy details up to date (ideally, do all of these things). Claims history can matter too, but rates are not pulled from a carnival prize wheel. 

Let Vern Fonk Insurance Help You Separate Fact From Fiction

These 10 Washington common home insurance myths are pretty typical when shopping for a home insurance policy, and you might feel like you need a decoder ring to crack the code. But you don’t have to fall for them! Let us help you out at Vern Fonk. Our knowledgeable agents can walk you through the intricacies of a typical policy and help you get the protection you need for your home and belongings. 

To get started with your own customized quote, give us a call at (800) 455-8276, get a quote online, or visit us today at one of our Washington locations. We look forward to helping you avoid falling into the trap of thinking flood protection is included in a typical policy, among many other issues! 

FAQs

How Can I Tell If My Home Insurance Includes Flood Coverage?

Home insurance coverage myths begin with this wet topic. You should just assume from the start that your policy does not cover flooding. The first place to look to confirm this is your declarations page and any of the policy documents you’ve kept in your filing cabinet. You should see a flood policy or flood endorsement. If you don’t, then you should look into purchasing this protection if you live in a flood-prone area. 

What Is the Difference Between Replacement Cost and Actual Cash Value?

Another one of the regular home insurance misunderstandings — that replacement cost vs market value is the same thing. Replacement cost is what it would take to repair or rebuild with materials of a similar kind and quality, without subtracting for depreciation. Actual cash value usually factors in depreciation, which means age and wear can reduce what gets paid. Same damaged thing, very different check. 

How Many Claims Are Considered “Too Many” for Home Insurance?

There is no one magic number that applies everywhere — that’s another one of those typical home insurance misconceptions. Insurers look at claim frequency, claim type, your history, the property, and state rules. One claim does not automatically wreck your rates, but repeated claims can affect what you pay or whether a company wants to renew the policy. 

Do I Need Separate Coverage for High-Value Items Like Jewelry or Collectibles?

One of the more enduring homeowners insurance myths that homeowners believe is that your nicest stuff is already covered. But the reality is that often you do need separate coverage. Standard homeowners policies usually place special limits on certain valuables, especially for theft. If you own expensive jewelry, collectibles, art, or similar items, ask whether you need scheduled personal property coverage, an endorsement, or a floater to protect them properly.