Many myths and misconceptions surrounding insurance can lead people to make ill-informed decisions or avoid getting coverage altogether. Let’s break down some common myths and separate fact from fiction.
Knowing the truth can help you become a smarter and more confident homeowner or driver. So read on to get the facts about car and home insurance and dispel some of the most common myths:
Myth 1: Life Insurance is Too Expensive
Life insurance is one of the most important coverages you can buy. However, many consumers skip it because of misconceptions about costs and eligibility.
While life insurance might be costly, there are ways to make it more inexpensive. Term policies are typically less costly than permanent ones, and you can find quotes using online calculators or talk to a licensed agent for a more accurate estimate.
It’s also good to purchase life insurance from Mountain Insurance while you’re young and healthy since premiums rise as you age. Plus, you never know when you’ll pass away. Life insurance can lessen the financial impact of your death and help your loved ones cover expenses, debts, and mortgages. It can even provide a legacy for your children.
Myth 2: Home Insurance Covers Renovations
Homeowner’s insurance is meant to protect your most significant investment. It’s essential to fully understand your policy, especially to avoid misinformation that could leave you underinsured.
If you’re planning to renovate your property, inform your provider so they can update your coverage. Significant renovations can impact your home’s overall value, which may raise your insurance premium. Undisclosed modifications can also result in denied claims.
It’s a common misconception that homeowner’s insurance covers every single item in your home. While your home insurance will cover personal belongings, you’ll need separate coverage for high-value items, such as artwork or jewelry. Additionally, if you’re running a home-based business from your house, you’ll need specific liability coverage for your business-related assets. The fact is that not all homeowners have a thorough understanding of their home insurance. This can lead to misconceptions that may be costly in the long run.
Myth 3: Older Homes are Cheaper to Insure
Many people make the mistake of assuming that older homes will be cheaper to insure than newer ones. However, this is only sometimes true. Because of the differences in construction procedures and materials, the cost of homeowners insurance may be more significant for older properties. Wooden floors, tube wiring, and plaster or calcimine walls are expensive, in contrast to more modern home construction methods like wood veneer floors and drywall.
This is why it’s important to insure your home based on its actual replacement cost rather than its market value. This ensures you are covered for the cost of reconstructing your property from the bottom up, not simply its market worth. Homeowners and renters may lose or damage their personal belongings, so having a good home insurance policy is essential. Sadly, some people are misled by insurance myths and forgoing coverage or making decisions that could negatively affect them.
Myth 4: Car Insurance Follows The Driver
Car insurance is a complex topic, and the information available can sometimes be clarified. This confusion can lead to misinformation and misunderstandings, which is why it is essential to understand the facts about car insurance.
One of the most common myths about car insurance is that it follows the driver. This is not true in most cases. Insurance companies usually base their rates on many factors, including the type of vehicle and the driver’s history. For example, getting a speeding ticket will cause your rate to go up.
However, most policies include permissive use, which allows you to let other drivers drive your car and still be covered by your policy. If they have an accident, your liability coverage will cover them, while their car insurance will provide supplemental secondary coverage (if the limits on your policy are reached). This is not a guarantee, though. The best way to ensure you’re covered is to review your auto policy before leasing your car.