What are some common misconceptions about homeowners’ insurance policies? ~

They don’t cover what you might think.  (Especially in California!)  …..

ME: is this a good policy?
INSURANCE AGENT: The ACME Platinum Supreme package is the best package offered anywhere in the country.  Its coverage surpasses any policy offered by other insurance companies.  And it costs less than $900 a month.  A low price for complete piece of mind (sign here please).  Thank you for choosing ACME Insurance.

So each year I faithfully pay them their $10945.26 premium, assuming I’m covered for anything that might happen.

Several years later -  

ME: Hello, ACME insurance?  Some dude just crashed his car into my house.  Am I covered?
INSURANCE COMPANY:  Sure!  There is just a small $12,000 deductible, but we will gladly pay any costs beyond that.  Thank you for choosing ACME Insurance.

 

Result - they pay, but because I used them, my rates are raised by $1200/yr.

A year later –

ME: Hello, ACME insurance?  A water pipe broke in the house and flooded the place!  Am I covered?
INSURANCE COMPANY:  Sorry, but water damage is no longer covered under your policy.  Thank you for choosing ACME Insurance.

(That same year I also get a notice from them stating that dues to rising costs they’re going to increase my premiums $1425/yr.)

 

2 years later -

ME: Hello, ACME insurance?  A tree fell on my house!  Am I covered? 
INSURANCE COMPANY:  Sorry, but kind of damage isn't covered under your policy.  Thank you for choosing ACME Insurance.

(That same year I get another notice from them stating that dues to rising costs they’re going to increase my premiums $1600/yr.)

 

3 years later -

ME: Hello, ACME insurance?  My house burned down in a wildfire.  Am I covered?
INSURANCE COMPANY: Sorry, but wildfire damage isn't covered under your policy.  Thank you for choosing ACME Insurance.

ME: What the **** IS covered under this policy?

INSURANCE COMPANY:  If subterranean mole people break through and damage your house’s foundation, well cover it 100%. Thank you for choosing ACME Insurance.

 

So I paid them over $15,000 a year just so I could be safe in case the mole people ever attack?  Talk about true peace of mind.  Thank you ACME Insurance.

 

 

 

Earthquake  and flood insurance is not standard coverage. 

Shuhak: I know, I know, your story is metaphorical. Your real damages fell through the cracks in your policy. Now, you have little or nothing left to insure, but as you begin to acquire things, be sure to read all insurance policy offers and ask questions (preferably by text or email so you have a record of what they told you). This post was edited by NYAD at November 6, 2022 3:50 PM MST