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

Rhea-AI Summary

Mercury Insurance (NYSE: MCY) on Dec 10, 2025 published guidance to correct common homeowners insurance misconceptions. The release explains that standard policies cover sudden, accidental perils (fire, theft, wind, burst pipes) but typically exclude flood and earthquake, mold from long-term dampness, and pest damage.

The company urges policy review for renovations, recommends separate flood/quake or endorsements for mold and business use, and highlights available discounts for newer homes and protective devices.

Key Figures

Net income $280.4 million Q3 2025 net income from 10-Q

Diluted EPS $5.06 Q3 2025 diluted EPS from 10-Q

Total revenues $1.585 billion Q3 2025 total revenues

Net premiums earned $1.410 billion Q3 2025 net premiums earned

Net investment income $84.0 million Q3 2025 net investment income

Ceded losses and LAE $1,292.9 million Nine months ended Sep 30, 2025

Loss and LAE reserves $3.596 billion Loss and LAE reserves balance from 10-Q

Cash balance $1.253 billion Cash as of Sep 30, 2025

Market Reality Check

$89.97 Last Close

Volume Volume 124,739 vs 20-day average 179,493 (relative volume 0.69x). low

Technical Price 89.97 trading above 200-day MA at 69.73, near 52-week high of 95.

Peers on Argus

MCY gained 0.78% with mixed peer moves: SIGI +1.52%, KMPR +1.58%, LMND +2.93%, HGTY +0.64%, while WTM fell 0.27%. No momentum scanner signals or same-day peer headlines were flagged.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 04	Consumer education	Neutral	-0.4%	Encouraged annual policy checkups and review of coverage and exclusions.
Nov 25	Weather preparedness	Neutral	+0.1%	Advised homeowners on preparing for unpredictable winter weather risks.
Nov 21	Safety guidance	Neutral	+3.2%	Shared winter driving tips to reduce weather-related collision risks.
Nov 20	Travel advisory	Neutral	+1.0%	Outlined holiday travel precautions and coverage awareness for drivers.
Nov 13	Holiday safety tips	Neutral	+0.1%	Provided Thanksgiving fire-safety guidance using NFPA incident data.

Pattern Detected

Recent educational and safety-focused releases have generally coincided with modest single-day price moves, mostly within a few percentage points in either direction.

Recent Company History

Over the last month, Mercury Insurance issued several consumer-focused guidance pieces, including a New Year insurance checkup on Dec 4, winter weather preparation on Nov 25, winter driving safety tips on Nov 21, holiday travel guidance on Nov 20, and Thanksgiving fire safety on Nov 13. Price reactions ranged from a small decline of -0.44% to a 3.22% gain, suggesting that these educational communications typically align with modest, incremental stock moves rather than major re-ratings.

Market Pulse Summary

This announcement focuses on clarifying common misconceptions about homeowners and renters insurance, emphasizing exclusions, endorsements, and the need for separate flood or earthquake coverage. It fits Mercury’s recent pattern of consumer education alongside seasonal safety campaigns. In the background, Q3 2025 results showed net income of $280.4 million, diluted EPS of $5.06, and cash of $1.253 billion. Investors may watch future filings and loss trends, including loss and LAE reserves of $3.596 billion.

AI-generated analysis. Not financial advice.

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 Newsroom@MercuryInsurance.com. 

View original content to download multimedia:https://www.prnewswire.com/news-releases/myth-busting-with-mercury-insurance-dispelling-common-misconceptions-about-homeowners-insurance-302638224.html

SOURCE Mercury Insurance

FAQ

What homeowners risks did Mercury (MCY) say a standard policy usually excludes on Dec 10, 2025?

Mercury said standard policies typically exclude flood, earthquake, pest damage, and mold from long-term dampness.

Does Mercury Insurance (MCY) say renters are covered by a landlord's policy?

No; Mercury notes a landlord's policy won’t cover a renter’s personal belongings or renter liability, so renters should buy renters insurance.

How did Mercury (MCY) recommend homeowners handle renovations and expensive upgrades?

Mercury recommends reviewing your policy with your agent to ensure adequate coverage for renovations or high-value upgrades.

Can Mercury (MCY) homeowners add mold or home business coverage to a policy?

Yes; Mercury says mold endorsements or business endorsements may be available for an additional cost or via a separate policy.

What cost-saving options did Mercury (MCY) highlight for homeowners seeking lower premiums?

Mercury highlighted discounts for newer homes, homes with fire protective devices, and water leak detection systems.

When did Mercury Insurance publish its myth-busting homeowners insurance guidance?

The guidance was published on December 10, 2025.