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Common Misunderstandings About Homeowners Insurance on the Highlands-Cashiers Plateau

Brooks Kittrell

Brooks grew up in Asheville, NC and since has spent 90% of his life living in various parts of Western North Carolina...

Brooks grew up in Asheville, NC and since has spent 90% of his life living in various parts of Western North Carolina...

Feb 25 1 minutes read

Homeowners insurance is often one of those "out of sight, out of mind" topics—until you really need it. When that moment arrives, whether it's a tree crashing through the roof, a burst pipe, or worse, you don't want to discover you misunderstood your coverage. With many myths floating around about homeowners insurance, let's set the record straight so you can make informed decisions about protecting your home on the Highlands-Cashiers Plateau.

Myth #1: Homeowners Insurance Covers Everything

A common misconception is that homeowners insurance covers every possible type of damage or disaster. While policies generally offer broad protection, they come with specific exclusions. For example, standard policies typically don't cover:

  • Flood damage: Homeowners in areas near water sources on the Plateau should consider separate flood insurance through the National Flood Insurance Program (NFIP) or private insurers.
  • Earthquake damage: This is usually available as an add-on or a separate policy, depending on the insurer.
  • General wear and tear or maintenance issues: Insurance is meant for sudden and accidental damage, not for gradual deterioration due to neglect or aging.
  • Sewer backups: Standard policies usually don't cover sewer or drain backups, but many insurers offer a rider for added protection.

It's crucial to read your policy carefully and understand what it covers and what it doesn't. Don't just assume you're protected.

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

Many homeowners assume their insurance should match the market value of their home. Actually, insurance is based on the cost to rebuild, not on resale value. While the market value includes land and location, replacement cost focuses on the materials and labor needed to reconstruct your home as it was before any damage. Given the fluctuating construction costs here on the Plateau, it's essential to periodically review your policy to ensure you have enough coverage.

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

Liability coverage in a homeowners insurance policy does protect you if someone gets hurt on your property, but there are exceptions. For example, if an injury results from neglect—like a rotting deck railing you knew needed repair—you could still be sued for damages beyond your policy limits. Additionally, if you run a business from home and a client gets hurt, your standard policy may not cover it.

Myth #4: My Policy Covers My Valuables Fully

Most homeowners policies have coverage limits for high-value items such as jewelry, artwork, collectibles, high-end electronics, and firearms. These limits might be far lower than the actual value of those items. If you have valuables that exceed these limits, you can add a scheduled personal property endorsement or rider to insure them for their full appraised value. This can provide broader protection, including coverage for accidental loss or damage that is often excluded in standard policies. Periodically reviewing your policy, getting professional appraisals, and keeping an updated inventory can ensure adequate protection.

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

With remote work becoming more common, many homeowners believe their standard insurance covers all work-related equipment and activities. This isn't always the case. Your policy may offer limited coverage for business property but often has restrictions on the value it will reimburse, particularly for items owned by your employer.

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.
  • No business liability protection: Injuries to clients, customers, or delivery persons on your property due to business activities might not be covered.
  • Business inventory: If you store products or materials at home, your standard policy likely won’t protect against theft, fire, or other damage.

To ensure full coverage, consider these options:

  • Home-based business policy: 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, it's wise to check with your insurer to confirm the right coverage—before any unexpected loss occurs.

Myth #6: Homeowners Insurance Covers Mold and Termite Damage

Mold and pest damage are generally seen as preventable maintenance issues, not sudden and accidental damage. Hence, most policies don’t cover them. If mold results from a covered peril—like water damage from a burst pipe—your policy might help with remediation. However, if the mold is due to long-term humidity or leaks that weren't addressed, you'll likely be on your own.

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

This surprises many 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 knowing the tree was dead and doing nothing—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 isn’t necessarily true. Insurance companies consider many factors when adjusting rates, including your claims history, the type of claim, and your location. One small claim might not impact your premium much, but frequent claims or a history of high payouts could lead to higher rates. It's important to weigh the cost of repairs against your deductible before filing a claim.

Final Thoughts

Homeowners insurance is essential but not one-size-fits-all. Understanding what is and isn't covered can help you avoid costly surprises. If you're unsure about your coverage, sit down with your insurance agent to review your policy and ensure you have the right protection in place.

Have questions about homeowners insurance and how it impacts your home on the Highlands-Cashiers Plateau? Let's chat.

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