Nearly 3 in 4 homeowners don’t know how their home insurance works

Home Insurance - Confusion about coverage
Nearly 3 in 4 Homeowners Don’t Kn...
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72 percent of participants of a Forbes Advisor survey don’t know what their coverage gives them.

While most homeowners understand that home insurance is critical, but according to the results of a new Forbes Advisor survey of 2,000 policyholders, the vast majority don’t know what their coverage provides.

Homeowners don’t understand their coverage even though they said they’re paying more for it.

According to the survey, homeowners don’t realize that their home insurance policy provides more coverage than just protecting their house and belongings against damage or theft. It stated that 72 percent of the respondents didn’t know that their policy includes liability coverage. Moreover, they didn’t realize that it is considered to be a critical coverage in case a visitor to the property should suffer an accidental injury or in case the policyholder accidentally damages someone else’s property.

Home Insurance - Questions - Survey

For instance, if someone from the policyholder’s household accidentally sends a baseball through a neighbor’s window, the liability coverage is what would pay for the damage. Still, just over half of the policyholder survey respondents – 51 percent – said that they didn’t have coverage for damage of that nature and another 21 percent said that they weren’t sure whether they had the coverage.

Homeowners have a great deal more coverage through home insurance than they realize.

The survey also asked the participants about their policies and the medical bills coverage they think they have in case their dog should bite someone. Though a standard policy will provide that coverage as part of its liability protection, but 39 percent of the respondents said that they didn’t think it was and another 18 percent said they didn’t know.

Of the respondents to this survey, only 44 percent of policyholders were aware that medical bills from dog bites are covered. That said, some insurers have lists of banned dog breeds, meaning that they won’t cover claims involving dogs on those lists. It’s important for homeowners to check to be sure they have that coverage if they have a pet.

Seventy one percent of home insurance customers think their policies will pay for vehicle damage if it occurs on the property, such as if it is affected by a house fire. That said, it won’t. A comprehensive auto policy would be required to pay for those repairs or replacements.

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