Insurance Myths

Insurance:

It’s a complicated topic. Most of us will purchase insurance so it is important to be educated. Sometimes it can be difficult to distinguish insurance truth from insurance myths.

Here 8 common myths.

Myth 1:

Insurance coverage should be purchased for a home based on real market value.
Houses should be insured based on how much it would cost to reconstruct them. This cost could vary greatly from one area of the country to another, which means some homeowners are significantly under-insured or even over-insured.

Myth 2:

An auto insurance company can cancel a policy if the policyholder causes a crash with extensive damages.
When insurers drop policyholders because of claims, they non-renew the policy in accordance with state laws.

Myth 3:

Homeowner’s policy covers all your stuff.
Homeowners’ policies have reduce coverage for some things like theft of jewelry and guns.

Myth 4:

Comprehensive auto coverage includes everything.
There are limitations with this type of coverage, it does not cover losses from a collision.

Myth 5:

Thieves prefer stealing new vehicles.
Thieves are more likely to steal older cars to sell for parts.

Myth 6:

If a policyholder loans his or her car to a friend who crashes it, the friend’s insurance company will cover the damage.
Whenever someone else crashes a policyholder’s car, the policyholder and his or her insurer must pay for the damage.

Myth 7:

Car color determines the cost of insurance.
The color of your car doesn’t influence your car insurance costs. The price is based on car make, model, engine size and the age of the vehicle, as well its overall safety record and the chance of theft. The age and driving record of the driver is also factored in.

Myth 8:

Your landlord’s insurance policy will cover your things.
Your landlord’s insurance policy should cover the structure but you’ll need renter’s insurance to cover your personal belongings.

Experts say that all of these misconceptions can lead to financial losses. It is important to always ask questions. To learn more, discuss concerns with one of our agents