Top 10 Myths About Insurance Debunked

Insurance policies can be extremely confusing and difficult to understand and process. You've heard conversations about them throughout your life, and they're often in the media. "My insurance doesn't cover this." "I'm worried about my health insurance." "This month's premium is too high for me." Common sentences, right? There are many myths surrounding this important part of Social Security that make it seem scarier and more complicated than it really is — when in fact, they really aren't that profound. With a good broker, financial advisor, and trusted provider, you can get insurance that covers all your bases.  

1.Car damage – who pays?

There are many misconceptions about car accidents and the insurance they cover. Some people seem to naively believe that whoever drives the car must pay for insurance. but it is not the truth. In most states, the vehicle owner is legally responsible for any damage, as this is where the primary insurance coverage comes from. Next time you're tempted to lend your car to someone else because you think it might not be a big deal, just make sure you trust their driving skills.

2.Home contents insurance covers everything

Your home insurance does not actually cover all of your belongings. Valuable items such as gemstones, electronics, jewelry, and other valuables need to be listed and valued by your company and then met with market value. This is why a personal checklist is a good idea as it will speed up the claims process significantly. People also don’t discuss with their insurance company whether these things are covered. You should check with your provider if you need to add these valuables to your policy or if you need confirmation.

3.Underestimating life insurance

Young people tend to be very confident about their condition and believe that they will not have to worry seriously about their health for at least the next year or two. This carelessness may be a good thing when it comes to not taking the pressure, but when it comes to taking control of your own insurance, it's actually very wrong. Young people get cheaper life insurance because their risk is lower, and there are no other benefits besides cost savings. Additionally, since they are younger and do not have much savings, life insurance can be very helpful in covering the expenses that would otherwise be left to the family in the event of an unforeseen accident.

4.Thinking an environmental disaster is coming to you

You don't live near water, so you don't need flood insurance. It doesn't rain either. There hasn't been an earthquake in a long time, so it should be fine. However, your insurance should always cover environmental disasters. These happen very suddenly and can happen anywhere. You should discuss with your broker what environmental catastrophes your insurance will protect you from, because if such a catastrophe occurs and you suffer damage, you will be completely defenseless and have no recourse.

5.Red cars cost more to insure

This is a very popular car insurance myth, but we’re not sure why it exists. However, like the others, this is laughably untrue. The color of your car doesn't matter when it comes to insuring your car and the insurance rates you get. The market value of your car is usually the main factor in determining insurance rates, and the quotes companies typically provide also play a role. Find a company that fits your budget.  

6.Home – market value or rebuilding cost?

Many people seem to think that the market value of the property affects the premium you receive, but this is not the case. Home insurance depends on the cost of rebuilding from scratch. Keep this in mind when looking for property and home insurance.

7.The law gives me a sense of security

If you paid for your home in full, you might think your home is also fully insured. However, this is not the case. You don't automatically start buying home insurance, you have to buy it and it is highly recommended that you do so.

8.My insurance covers my home business

Wrong. You should call your broker to see if an extension is available, which also covers your company. First, the company needs to understand your business. Then you need to figure out the details of the coverage you want.

9.Postal code doesn’t matter

Not true again! Crime and theft statistics vary from area to area, so insurance there may be more expensive than in other areas. You should definitely find out about the different prices in these areas and whether your area is within your budget. This is why living in a decent neighborhood is important!

10.My Precious Loyalty Discount

It is thought that losing their current provider's loyalty discounts will hit them more financially than they can afford. However, you may be able to get a cheaper price with another company, even compared to your current loyalty discount price - so don't be afraid to switch.

Conclusion

Most misconceptions about insurance are based on the idea that insurance is a service provided to you by law and once you receive your package, everything is taken care of and covered. However, there are different packages for a reason. Each asset and item has a different meaning and may not be included in your plan at all from the beginning, such as: B. For personal jewelry. Even if it's not your fault, something else can still come out of your pocket; just like car insurance. Knowing these little instructions will help a lot in the long run!