We live and breathe insurance. But because we know it so well, we assume everyone else does, too. However, 65% of Americans have no idea what their home insurance fully covers, according to a survey by Goosehead Insurance. Half of those surveyed (45%) said they'd had a home claim denied because they didn't have the right coverage. This lack of knowledge may lead to unrealistic expectations when they file a claim.

Here are four common insurance misconceptions and how you can address them before there's a claim:

1) Water damage is covered by home insurance, so all water damage is covered. To consumers, water damage is water damage. It's counterintuitive that flooding because of a running toilet is covered but flooding because of four inches of rain is not. It's equally counterintuitive that a burst pipe is covered, but that pipe leaking for two months is not.

A solution is to include seepage or leakage, water backup or sump pump and service line coverage plus a flood policy with all your home quotes. Before you talk premium, walk through each part of the policy and then each endorsement. Explain the types of water damage, how common water claims are, and how these endorsements protect them. If they decline an endorsement, you have proof you offered the coverage as errors & omissions protection.

2) All my stuff is covered. Few agents discuss personal property, so consumers assume everything is fully replaceable within Coverage C. It looks like a big number, but it goes faster than you'd think—especially when contents coverage is calculated as only 50% of Coverage A.

Explain how Coverage C is generated as a starting point for the average household, and then explore whether they need additional coverage. For example: What kind of furniture and appliances do you have? How full are your rooms, storage spaces and garage?

Customers with high-end appliances and furniture, antique or vintage pieces, luxury taste, or those who simply have a lot of stuff may warrant a deeper discussion about Coverage C.

3) It's covered no matter what happens to it. The worst time for your customer to learn about personal property covered perils and internal coverage limits on unscheduled jewelry is after they've misplaced their engagement ring.

While discussing personal property, ask what items—or collections of items—they own with a replacement value over $500. Prompt them to think about: 

• Luxury items like jewelry and watches.
• Inherited items, like grandma's silver.
• Items they have, or should have, in a safe like cash or coins.
• Tools, equipment or items related to their hobbies and collections.

Remember to ask about what's in the garage, basement, attic and any outbuildings.

Once you have a list, talk through covered perils—plus what isn't covered—and identify items you recommend be scheduled. As a bonus, you may identify opportunities to cross-sell additional policies.

4) I might as well file that roof claim because I've hit my deductible. Consumers are familiar with one type of deductible: health insurance. It makes sense that some would think home insurance deductibles work the same way.

When presenting the home quote, talk about the purpose of home insurance. Proactively tell them it isn't for maintenance issues, like replacing an aging roof. Educate on the deductible and how it applies to each claim. Let them know filing a claim, even a small claim, will impact their premium for at least three years and let them know they can, and should, give you a call before deciding whether to file a claim.

With the superpowers of ease, choice and advice, independent agents are uniquely positioned to help consumers understand the complexities of homeowners insurance. By addressing these misconceptions, you can ensure your customers aren't among the 45% who have a claim denied because they have the wrong coverage.