8 Common Insurance Myths Debunked
Insurance is necessary to protect you and your loved ones in today’s world, but it’s not always easy to understand. In fact, there are many misconceptions about insurance, whether is be auto, homeowners, life or business. Here are some facts to a few common insurance myths.
Auto Insurance
Myth: A brand new car will save me money on auto insurance.
Fact: Buying a brand new car does not automatically mean savings on an auto insurance policy. In fact, insurance premiums can
Home Owners Insurance
Myth: All water losses to my home are covered.
Fact: If a pipe bursts in your kitchen or rain comes in through a wind-damaged roof, you are covered. Unfortunately, most policies exclude damage for flooding, sewer backups and below ground water.
Myth: If your old appliances are destroyed like a television and you file a claim, you will receive brand new replacements.
Fact: As it turns out, there is a real difference between Actual Cash Value and Replacement Cost Value when it comes to replacing contents during a claim. For example, if your 10-year-old television is destroyed in a fire, you will need to have Replacement Cost coverage to actually be able to cover the cost of buying a new one.
Myth; Homeowner’s insurance only needs to cover the market value of your home.
Fact: Actually, that’s not the case. The cost to totally rebuild your home is usually much more than its market value. You’ll need to consider today’s construction and labor costs when thinking about homeowner’s insurance. With the current inflation on parts and labor prices it’s a good idea to have your policy updated.
General Insurance
Myth: You will always be paid the stated value for your “scheduled” items.
Fact: No, that’s not always the case.
If you have a high value personal property item (say jewelry) and “schedule” it with a stated value of $10k and it’s lost or stolen, you may only be covered for the current Replacement Cost Value up to the stated value. Think of the stated value as the limit instead of a guaranteed dollar figure.
Myth: I can negotiate my insurance rates
Fact: Insurance providers actually calculate your rate using a proprietary algorithm. Your data — including the vehicle you drive, your annual mileage and your driving history — is filtered through that algorithm. The rate at which a company arrives is the rate it can offer you. That being said, there are usually discounts that can be applied whether it be multiple policy, military, etc.
Life Insurance
Myth: If you have health issues, you can’t get life insurance.
Fact: Although insurers typically use your health to calculate rates and coverage amounts, it doesn’t mean you can’t get life insurance with a pre-existing condition.
Myth: If you’re single and have no dependents, you don’t need life insurance.
Fact: Life insurance isn’t just for the breadwinners of the family. For example, if a parent or guardian co-signed on your student loan, a new car or your first mortgage, life insurance can help protect the co-signer from taking on the debt if you pass away.
Fact: Insurance protection for NIHFCU members through TrueStage life insurance can help protect the people who matter most in your life. Check out the insurance plans and policies with affordable rates to fit your budget.
