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4 Big Misconceptions about Home Insurance

BOSTON ( TheStreet) -- A recent poll shows few Americans know the ins and outs of homeowners' insurance -- even though misunderstandings can wipe you out if disaster strikes and you're not covered.

"Many consumers are purchasing insurance without really comprehending what they're buying," says Laura Adams of, which found that less than half of people surveyed answered a series of questions correctly about homeowners' policies. commissioned Princeton Survey Research Associates International to poll 1,003 adults about what homeowners' insurance does and does not cover.

The result: For most questions asked, more than 50% of those surveyed either responded incorrectly, admitted they didn't know the answer or refused to reply at all.

Adams believes so few Americans understand homeowners' insurance because consumers often buy it "simply because they have to." After all, mortgage lenders require borrowers to carry policies until homeowners pay their loans off.

But Adams warns that property owners can lose everything if catastrophes not covered by people's policies strike.

"The danger is that you assume a particular disaster like an earthquake is covered -- but then it happens and you find out too late that you're not," she says.

Here's a look at four myths about homeowners' coverage that found lots of Americans believe.

For each myth cited, the percentage of people who don't know it's false refers to how many poll respondents either gave the wrong answer, said they didn't know the correct information or declined to reply.

Myth No. 1: My policy won't cover a laptop or cellphone stolen from my car
Consumers who don't know that's false: 73%

Homeowners' insurance covers personal items snatched not just from your house, but also from your car, self-storage unit or other places -- something found just 27% of those polled knew.

Some 28% thought no insurance covers those losses, while 34% believed incorrectly that auto policies protect you against such thefts. Another 11% either didn't know the answer to the question or refused to provide a response.

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