There are many NJ homeowners insurance myths and misconceptions that will confuse you. Knowing what’s what in home insurance is a must if you own a home.

A home is likely to be the most expensive thing you’ll ever buy. Having the right insurance policy so you understand what you’re paying for is imperative.

Below, we’ll discuss the top New Jersey homeowners insurance myths and misconceptions to know:

Watch our video summary:

Myth 1: Your Coverage Limit Should Match the Value of Your Home

Many homeowners think they have to base their coverage on their home’s current market value. This is not true.

Your purchase price can be more or less than what it would cost to rebuild your home if a loss occurs. You’ll need enough insurance to cover a rebuild, and more if possible.

Myth 2: Home Insurance is a Waste of Money

Home insurance is important if you want to protect the investment you made in your home. Imagine how much it would cost you to rebuild your home, or repair it in case of an emergency.

You might think of it as an unnecessary expense now, but you’ll wish you had it later on down the line if/when something happens. It can help you if there is a fire, burglary, hailstorm or different disaster.

Myth 3: Your Business is Covered By Your Policy

If you have a home-based business, you’ll need a different policy. Many home insurance policies exclude business liabilities.

You should purchase business insurance that includes property and liability coverage instead, such as a business owners policy. These types of policies are best suited for small- and medium-sized businesses.

They also include business interruption insurance, so if something happens and you need to pause your business for a while, you’ll have coverage.

Myth 4: When You’re on Vacation Your Home is Covered

If you hop on an airplane taking no prior precautions to protect your property, you might not be covered.

You should take steps such as turning off your home’s water supply and empty the pipes to ensure heating system maintenance while you are away.

If you don’t do this, it’s unlikely you’ll have coverage against frozen pipes bursting.

Policies vary, and you may protect your insurance policy by having somebody visit your home while you’re away, depending on the length of your vacation.

However, you will need to double check the recommended frequency with your insurance provider to be sure.

Myth 5: All Belongings Receive Coverage

NJ homeowners insurance is supposed to protect your belongings.

However, you must go through your policy with a fine-toothed comb to be sure of what is covered and what isn’t.

You may have to make add-ons to your policy for certain items.

Myth 6: There’s No Need to Make an Inventory List

Making an inventory list of your possessions is a smart thing to do.

It’s proof of your homeownership in case you must file a claim.

You’ll prepare a list of everything lost, and it helps to have this done in advance.

Myth 7: Flood Damage to Your Home Will be Covered

Sometimes water damage is covered, but flooding likely won’t be. You will need a flood insurance policy separate from your usual policy.

There are several places you can get a flood insurance policy, so you’ll want to explore your options before deciding.

Myth 8: Jewelry and Family Heirlooms are Covered

As we touched on earlier, all of your items won’t have coverage, and you may need to add them on to your home insurance policy.

You can either purchase an endorsement or rider to add to your policy or raise the limit depending on what’s best for you.

This may be a good option for people who have jewelry, artwork, and silverware they’d like to protect.

Myth 9: Injuries that Occur in Your Home Will be Covered

This all depends on who was injured in your home. If it is a family member who also lives within your home, you wouldn’t file a claim under your home insurance. This would go through your health insurance.

However, if it is a guest who suffers an injury, liability protection comes into play. You’ll have protection from lawsuits up to the liability limit of your policy.

Myth 10: It Replaces Your Belongings Like New

This all depends on how your belongings are insured.

If you insure them for their actual cash value, the New Jersey insurance company will reimburse you for the value at the time of the loss.

This can mean getting the depreciated value of your belongings, which might not be enough to replace them at what they cost today.

Myth 11: Your Policy Will Cover Damage Caused by Termites

Termite infestation is excluded from a standard New Jersey homeowners insurance policy. Insurers are leaving it up to you to maintain your home well enough to keep infestation and similar issues at bay.

They will put your infestation down to a lack of proper maintenance. Make sure you have your home regularly inspected for termites, and work with a pest control company to get rid of the issue completely.

If you don’t, it’ll turn into a very expensive problem that can damage the structure of your property.

Hopefully, these top NJ homeowners insurance myths and misconceptions have helped you to figure out what you need to do with your home insurance policy.

Maybe you need to increase your limit, make an inventory list, or call a pest control company. Whatever it is, don’t wait until it’s too late!