What is a common misconception about homeowner's insurance coverage?

A common misconception about homeowner's insurance coverage is that it covers all damages without limitations. In reality, homeowner's insurance policies are designed to protect against specific risks and perils that are clearly defined in the policy. This means that not all types of damage are covered, and there are often exclusions for certain events, such as floods or earthquakes, unless additional coverage is purchased.

Understanding the limitations of homeowner's insurance is crucial for homeowners to ensure they have the right coverage for their needs. Policies typically specify which events are covered and may include caps on certain types of claims. Therefore, assuming it covers all damages without limitations can lead to unexpected financial setbacks for homeowners when faced with a loss that falls outside their policy's coverage.