6 Insurance Myths Plaguing the Industry
There are many insurance misconceptions floating around that make it difficult to determine what’s true and what’s not. Unfortunately, these common mistakes could put you at a serious financial risk.
We’ve put together a list of so you can avoid these common mistakes! Here are some of the most common insurance myths plaguing the industry.
“I don’t need rental car insurance – my auto policy will cover it.”
A rental car agreement may leave you liable for things that aren’t included in your auto policy. Some examples of this include administrative fees, loss of use, and diminished value. Furthermore, if you don’t have collision and comprehensive coverage on your own policy, you won’t have that coverage on the rental vehicle either. This means you would have to pay the repair bill out of pocket which can cost you a lot, especially if the vehicle is new. Learn more about rental car insurance and whether you need it.
“Full coverage means I’m covered for everything.”
Although it may sound a bit deceiving, full coverage does not mean everything can be claimed on your car insurance policy. It simply means that comprehensive and collision coverage is added rather than liability only. Full coverage gives you the ability to pay your deductible and have your car repaired if it’s damaged in a covered loss.
“If my friend crashes my car, their insurance will cover it.”
Unfortunately, auto insurance follows the vehicle rather than the driver. This means that if you loan a car to a friend and they get into an accident, you and your insurance policy would bear the primary responsibility for any damage caused. If the damage exceeds your policy limits, then your friend’s policy would kick in. Learn more about insurance coverage when borrowing or lending a car.
“I should insure my home for the amount I purchased it.”
Purchasing a home and insuring a home include different factors. When purchasing a home, you will be dealing with Market Value which includes factors like land value, neighbor features, and area trends. When purchasing insurance, you are looking at replacement cost and determining the value needed to rebuild your home.
“I have an umbrella policy, so I’m covered for everything.”
Although personal umbrella policies provide an additional layer of liability protection on top of your other policies, there can still be coverage gaps. For example, your umbrella policy won’t cover your own injuries or losses. It would not extend to cover personal property such as uninsured jewelry if it is stolen.
“All companies offer the same policies.”
Like any other product or service, quality changes from company to company. This is no different for insurance, where the details lie within the language of the policy. Although the name of the coverage on your policy may look the same from different insurance companies, the coverage limits and restrictions as well as the experience you receive can be different.
It is important to do your research on insurance companies or seek consultation from an independent insurance agency like us. We can help you do the research and compare coverage options among competitive rates – just give us a call today at 415-386-2283!