Myth-Busting with Mercury Insurance: Dispelling Common Misconceptions About Homeowners Insurance

Debunking the Most Common Myths That May Mislead Consumers

LOS ANGELES, Dec. 10, 2025 /PRNewswire/ -- When it comes to homeowners insurance, misconceptions and myths abound online and via word of mouth. Many policyholders may assume that their insurance covers everything in the event of a peril, but the reality is that homeowners insurance is much more nuanced than that, with limits and exclusions that all policyholders should be familiar with.

Mercury Insurance (NYSE: MCY) wants to help educate consumers and dispel some common homeowners insurance myths that can be misleading and result in some costly surprises down the road.

"Many homeowners are surprised to learn that their policy doesn't cover every situation, which is why understanding what's included — and what isn't — is so important," said Bonnie Lee, Vice President of Property Claims at Mercury Insurance. "By reviewing your policy and understanding key limits and exclusions, you can make sure you have the coverage you truly need."

Common Homeowners Insurance Myths

Myth: Your homeowners insurance policy covers everything.

Many policyholders mistakenly believe their homeowners insurance will pay for any kind of damage or loss to their home. In reality, a standard homeowners policy typically covers your house and personal belongings only for specific, sudden and accidental events. These include fire, theft, wind, hail and certain types of water damage (e.g., water damage from a burst pipe) — and always subject to the policy's limits, deductible and exclusions. There are many situations a standard policy does not cover.

"Generally speaking, homeowners insurance is designed to help you rebuild your home and replace personal property if it is damaged or stolen due to a covered cause of loss," said Lee. "However, flooding from rising water (including storm surge) and damage from earthquakes are usually excluded. If you live in an area prone to these risks, you may need to purchase separate flood or earthquake insurance to help protect your home."

Additionally, renovations to your home or any expensive upgrades should be reviewed by your agent to ensure you have adequate coverage. And, keep in mind that home insurance is not a maintenance policy — homeowners are responsible for dealing with any wear and tear that occurs to their home.

Myth: Home insurance is extremely expensive.

While the cost of home insurance is on the rise, going without it can be much more costly should a peril strike your home. By shopping around and knowing what you need, you can find an affordable policy that meets your needs and budget. Additionally, it's crucial to research what discounts are offered by an insurer. Mercury, for example, offers discounts for newer homes, as well as those with fire protective devices and water leak detection systems, among others. So, while the cost of home insurance itself is rising, there are ways that homeowners can help mitigate that while still protecting an important financial asset.

Myth: Only homeowners should get insurance; renters are covered by the landlord's home insurance.

Renters insurance is not always required by landlords — and just under half of renters in the United States carry such insurance despite its relative affordability. Without renters insurance and personal liability coverage, you'll have to pay out of pocket if your personal belongings are stolen or damaged in a fire, or if someone is injured on your property and decides to take legal action.

"Your landlord's insurance won't cover your personal belongings, nor will it protect you if someone is injured in your rental and decides to sue," said Lee. "Renters may not be responsible for repairing the home they live in, but there's always a chance their possessions and valuables will need to be replaced if they are damaged or stolen, so purchasing a policy is a smart way to provide financial security."

Myth: Home insurance covers pests and mold infestations.

Generally, homeowners insurance does not cover damage caused by pests, rats, raccoons and mold infestations. Additionally, damage from animals like bees, bedbugs, termites and others are rarely covered, which means pest control falls upon the responsibility of the homeowner.

In many cases, coverage applies only if the original damage was caused by a covered peril. For example, if you live in a damp climate and mold develops naturally, most policies won't cover it. But, if the mold results directly from a covered event, like a burst pipe, you may be protected. A mold endorsement can sometimes be added to your policy for an additional cost.

Myth: Home businesses are automatically covered by home insurance.

Most homeowners policies won't cover a home-based business unless you have bought extra protection. Mercury recommends talking with your insurer to review your options — you may be able to add an endorsement to your policy, or you might need a separate business policy. Taking that step keeps both your home and your business safeguarded if something unexpected happens.

To learn more about what's typically covered in a homeowners insurance policy (and what's not), visit Mercury's blog.

About Mercury Insurance

Mercury Insurance (NYSE: MCY) is a multiple-line insurance carrier predominantly offering personal auto, homeowners, renters and commercial insurance through a network of independent agents in Arizona, California, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury writes other lines of insurance in various states, including commercial, business owners and business auto, landlord, home-sharing, ride-hailing and mechanical protection insurance. Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultra-competitive rates with excellent customer service, through more than 4,200 employees and a network of more than 6,340 independent agents in 11 states. Mercury has earned an "A" rating from A.M. Best, as well as "Best Auto Insurance Company" designations from Forbes and Insure.com. Interested media can follow Mercury and receive notifications about new press releases at the new Mercury Insurance Newsroom at https://newsroom.mercuryinsurance.com/, follow the company on X, Instagram or Facebook or email us at [email protected]. 

SOURCE Mercury Insurance