7 Property Insurance Myths That Could Cost You Thousands

Most people don’t think about their property insurance—until they need it. That’s when the fine print becomes painfully clear. Maybe you assume your home insurance will cover all water damage or that your business policy includes equipment breakdowns. Unfortunately, that’s not always the case.

We’ve seen too many people get hit with unexpected expenses because they didn’t realize what their policy actually covered (or didn’t cover). So, let’s clear up some of the biggest property insurance myths—before they cost you thousands.

1. “My Home Insurance Covers All Water Damage”

Not necessarily. Most standard home insurance policies cover sudden water damage (like a burst pipe), but they don’t cover flooding or sewer backups.
That means if heavy rain floods your basement or a sewer line backs up, you could be paying out of pocket unless you have extra coverage.

💡 What to Do: Check your policy for flood insurance and water backup coverage—especially if you live in a flood-prone area or have a basement. It’s usually an easy add-on that can save you thousands.

2. “My Insurance Will Cover the Full Cost of Rebuilding My Home

Not always. Your policy might cover the market value of your home, but rebuilding it could cost way more—especially with rising construction prices.
If your home is insured for $300,000 but it now costs $400,000 to rebuild, guess who’s paying the extra $100K?

💡 What to Do: Ask your insurer about replacement cost coverage instead of actual cash value. Also, look into inflation protection so your coverage adjusts as costs rise.

3. “Equipment Breakdowns Are Covered”

Not in most cases. If your furnace, AC, or major appliances break down due to wear and tear or mechanical failure, insurance won’t help.
That means if your HVAC system dies in the middle of winter, you’re on your own.

💡 What to Do: Look into equipment breakdown coverage—it’s an inexpensive add-on that can cover repairs or replacements for things like HVAC, electrical panels, and major appliances.

4. “My Home or Business Is Covered Even If It’s Vacant”

Think again. Most policies won’t cover a home or business if it’s been vacant for more than 30-60 days.
That means if a break-in, fire, or pipe burst happens while your property is empty, you might not be covered.

💡 What to Do: If your property is going to be vacant for a while, talk to your insurer about a vacancy permit or landlord policy. It could be the difference between full coverage and zero coverage.

5. “Business Interruption Insurance Covers Everything”

Not exactly. Business interruption insurance is great, but it only kicks in if your business shuts down due to a covered physical loss—like a fire or storm.
But if your business is forced to close due to a cyberattack, government shutdown, or supply chain issue, you’re probably not covered.

💡 What to Do: Make sure you understand what your business interruption policy actually covers. If you rely on suppliers, you might need contingent business interruption coverage.

6. “My Expensive Jewelry, Art, or Electronics Are Fully Covered”

Not always. While home insurance covers personal belongings, there are limits—especially for high-value items like jewelry, fine art, and collectibles.
If you have a $10,000 watch but your policy only covers $2,500, you’re out of luck.

💡 What to Do: If you own expensive items, ask about scheduled personal property coverage to ensure full protection.

7. “Basic Liability Coverage is Enough for My Rental or Commercial Property”

Not if you want to sleep at night. Basic liability coverage might not be enough if a tenant sues you for an injury or if damage to a neighboring property leads to a legal battle.
Some policies don’t cover tenant negligence or guest injuries beyond a certain amount.

💡 What to Do: If you own a rental or commercial property, ask about comprehensive liability insurance or umbrella coverage to avoid costly lawsuits.

Final Thoughts: Are You Actually Covered?

Insurance is one of those things you don’t want to think about—until you have to. The problem is, by then, it’s too late.

What to do next:

• Review your policy to spot any gaps.

• Update coverage limits based on today’s rebuilding costs.

• Add endorsements for things like water backup, equipment breakdown, and high-value items.

• If you own rental or commercial property, double-check your liability protection.

Don’t wait until disaster strikes to realize you’re underinsured. If you’re not sure what’s missing in your policy, we’re here to help.

Need a policy review? Contact us at www.starisks.com for a free risk assessment today.