Homeowners insurance is a critical aspect of protecting your investment, yet many misconceptions persist, especially among St. Louis homeowners. Let's address some common myths to help you make informed decisions about your coverage.
Myth #1: Homeowners Insurance Covers All Types of Damage
While standard homeowners insurance policies offer broad protection, they come with specific exclusions. In the Midwest, it's essential to be aware of the following:
Flood Damage: Standard policies typically do not cover flood-related damages. Given the proximity of St. Louis to the Mississippi River, homeowners should consider purchasing separate flood insurance through the National Flood Insurance Program (NFIP) or private insurers.
Earthquake Damage: Missouri, particularly the southeastern region, is near the New Madrid Seismic Zone. Earthquake coverage usually requires an additional endorsement or a separate policy.
Sewer Backups: With aging infrastructure in parts of St. Louis, sewer backups can be a concern. Standard policies often exclude this, but many insurers offer riders for added protection.
Myth #2: My Home is Insured for Its Market Value
Insurance coverage should reflect the cost to rebuild your home, not its current market value. Construction costs can fluctuate due to material prices and labor availability. Regularly reviewing your policy ensures you have adequate coverage to rebuild in case of a loss.
Myth #3: Injuries on My Property Are Always Covered
Liability coverage does protect you if someone is injured on your property, but there are exceptions. For instance, if the injury results from negligence, such as failing to repair a known hazard, you could be liable beyond your policy limits. Additionally, if you operate a home-based business, injuries related to business activities may not be covered under a standard policy.
Myth #4: My Valuables Are Fully Covered Under My Policy
Standard homeowners policies often have limits on coverage for high-value items like jewelry, art, or collectibles. To ensure these items are fully protected, consider adding a scheduled personal property endorsement to your policy, which covers specific items for their appraised value.
Myth #5: Working from Home Doesn't Affect My Homeowners Insurance
With the rise of remote work, many assume their homeowners policy covers all work-related equipment and liabilities. However, standard policies may offer limited coverage for business property and typically exclude business-related liability. If you have significant work equipment or clients visiting your home, consider additional coverage options like a home-based business policy or business property endorsement.
Myth #6: Mold and Termite Damage Are Covered by Homeowners Insurance
Mold and termite issues are generally considered preventable through regular maintenance. Insurance policies usually exclude damage resulting from neglect or lack of upkeep. However, if mold results from a covered peril, such as water damage from a burst pipe, your policy may cover remediation costs.
Myth #7: If My Neighbor's Tree Damages My Home, Their Insurance Pays
In most cases, if a neighbor's tree falls on your property, your homeowners insurance covers the damage. If the tree was known to be hazardous and your neighbor neglected to address it, their insurance might be liable. It's advisable to discuss potential hazards with neighbors to prevent such situations.
Myth #8: Filing a Claim Will Always Increase My Premiums
While filing a claim can impact your premiums, insurers consider factors like claim frequency, severity, and your overall claims history. A single claim may not lead to a significant increase, but multiple claims over a short period can affect your rates. It's important to assess whether filing a claim is necessary or if minor repairs can be managed out-of-pocket.
Local Insights: Homeowners Insurance Trends in St. Louis
Homeowners in the St. Louis metro area might be hearing about skyrocketing insurance premiums, but there’s some good news—our region is in a much better position than many others. A new study from the National Bureau of Economic Research (NBER) shows that while homeowners insurance costs are up 33% nationwide since 2020, much of that increase is hitting high-risk disaster zones and areas heavily reliant on reinsurance. St. Louis Real Estate News
In Missouri, the average cost of homeowners insurance in 2023 was $2,706, with projections for 2024 slightly decreasing to $2,697. This stability is favorable compared to national trends. St. Louis Real Estate News
However, it's important to note that premiums can vary within the region. For example, the average annual homeowners insurance rate in St. Louis is $2,745, which is higher than some neighboring areas. NerdWallet
Final Thoughts
Understanding the specifics of your homeowners insurance policy is crucial to ensure adequate protection. Regularly review your coverage, especially in light of regional trends and potential risks specific to the St. Louis area. If you have questions or need assistance navigating your homeowners insurance options, feel free to reach out. Let's ensure your home and assets are well-protected.
