When it comes to home insurance, misinformation is more common than you’d think. From assumptions about what’s covered to confusion about policy value, these Home Insurance Myths can lead to poor decisions and costly mistakes. Understanding the truth behind these myths is crucial for making informed choices and ensuring your property is properly protected.
Whether you’re a homeowner, a tenant, or simply exploring your options, debunking these myths can help you secure the right protection for your home and everything in it.
What are the Most Common Misconceptions About Home Insurance?
Several misconceptions still shape how people view home insurance—what it covers, who needs it, and how much is enough. Let’s clear the air by tackling the most common home insurance myths one by one.
Home Insurance Myth 1: Home Insurance Covers Everything Automatically
This is one of the most common misunderstandings. Most policies cover a wide range of risks, but not everything is included by default.
What’s typically covered
- Fire and smoke damage
- Theft
- Burst pipes and leaks
- Storm and lightning damage
- Liability protection
What’s usually not covered (unless added)
- Flood or earthquake damage
- Damage from poor maintenance
- Pest infestations
- High-value items beyond set limits
Tip: Always read the list of exclusions. Consider optional add-ons to fill in the gaps.
Home Insurance Myth 2: I Should Insure My Home Based on Market Value
Many assume that home insurance should match their property’s market value. However, the correct approach is to insure based on the rebuild cost—the amount needed to rebuild the home from scratch.
| Factor | Market Value | Rebuild Cost |
| Includes land | Yes | No |
| Affected by market trends | Yes | No |
| Needed for Insurance | No | Yes |
Tip: Use a rebuild calculator or get a professional surveyor’s advice to estimate rebuild value correctly.
Home Insurance Myth 3: Renters Don’t Need Home Insurance
Even if you don’t own the property, you’re still responsible for your personal belongings and liability. One of the common home insurance myths is that renters don’t need coverage—but a policy tailored for renters, known as tenant insurance, is essential.
Renters’ insurance covers:
- Personal belongings (furniture, electronics, clothes)
- Temporary housing if your rental becomes unlivable
- Liability cover if someone is injured in your home
Tip: Don’t assume your landlord’s policy covers your belongings—get tenant insurance to protect your valuables and liability.
Home Insurance Myth 4: All Home Insurance Policies Are the Same
Each policy is different—coverage limits, exclusions, deductibles, and customer service levels vary between insurers. Comparing only premiums can leave you underinsured.
Key differences to look for
- Whether it covers actual cash value or replacement cost
- Maximum cover for valuables like jewellery or electronics
- Inclusion of accidental damage or loss of use
- Customer claim settlement ratings
Tip: Ask for a sample policy document and compare features, not just prices.
Home Insurance Myth 5: Claiming Small Damages Is Always a Good Idea
It’s tempting to claim for every little issue, but doing so might impact your premium over time. Most policies come with a deductible—a set amount you pay before insurance covers the rest.
Before claiming, consider:
- Is the cost of damage more than your deductible?
- Will this affect your claim history or no-claims discount?
- Can the issue be fixed quickly and affordably without filing?
Tip: Reserve claims for significant losses or when self-funding isn’t practical.
Home Insurance Myth 6: I Don’t Need Home Insurance Because I’ve Never Had a Problem
Just because nothing’s happened yet doesn’t mean it won’t. Home insurance is about preparation, not prediction.
Common unexpected risks
- Burst pipes during cold weather
- Storm or hail damage
- Theft while on holiday
- Accidental fires or electrical issues
Tip: Think of home insurance as a safety net that protects your peace of mind.
Home Insurance Myth 7: My Valuables Are Automatically Covered in Full
Standard policies have a cap on how much they’ll pay for high-value items like jewellery, art, or tech gadgets.
| Item | Standard Cover Limit | What You Should Do |
| Jewellery | Often up to ₹1,00,000 or 20% of total content cover | Declare separately with valuation certificates |
| Artwork | Often not included in the standard cover | Get a professional appraisal and add as a rider |
| Laptops | Covered under electronics with conditions | Check usage terms and consider add-on coverage |
Tip: Declare high-value items explicitly. You may need to list them with appraisals for full coverage.
Home Insurance Myth 8: Flood or Earthquake Damage is Covered by Default
Most property insurance policies don’t cover natural disasters unless you specifically add that protection.
Add-on options
- Flood insurance (essential if you live in a flood-prone area)
- Earthquake protection
- Storm surge or subsidence cover
Tip: Know your local risks and add relevant riders to your policy.
Home Insurance Myth 9: I Can’t Get Insurance for an Old Property
One of the common home insurance myths is that older homes can’t be insured. In reality, older homes can absolutely be insured—though you might pay more due to increased risks such as outdated wiring or plumbing.
What insurers may check
- Age of roof, plumbing, and electrical systems
- History of previous claims
- Structural soundness
Tip: Upgrading key systems can improve eligibility and lower your premium.
Home Insurance Myth 10: Lower Premiums Always Mean Better Value
One of the persistent home insurance myths is that a cheaper premium equals a better deal. But cheap doesn’t always mean smart. A lower premium might come with a higher excess, limited coverage, or slower claims service.
Compare beyond price
- Are you covered for accidental damage?
- What’s the claim turnaround time?
- How high is the deductible?
Tip: Strike a balance between price and protection. Value comes from how well the policy fits your needs—not just its cost.
Understanding the truth behind common myths can save you from expensive surprises later. Read the fine print, ask questions, and choose a cover that matches your real needs—not just assumptions.
