Insurance companies love or hate them they are a necessity in today’s life. As they help protect you and your family if something unexpected happens.
And with insurance being so complicated at times it’s best to understand your policy. As there are many myths regarding insurance. Here are some of the most common insurance misconceptions explained, as sourced from insurance company websites.
Myth: Red cars cost more to insure.
Fact: The color of your car does not influence insurance rates. Factors that do matter include: year, make, model, engine size, and body type. And the drivers listed on your policy.
Myth: You’ll pay less for insurance with a small car.
Fact: According to a study from Insure.com, drivers of small and mid-size SUVs and minivans pay the least for insurance. Small cars are often driven by younger, inexperienced drivers who tend to submit more claims. In addition, small cars have more expensive injury claims because they lack the protection and weight of larger vehicles.
Myth: My homeowners insurance covers the business I run out of my home.
Fact: Standard home owner’s insurance policies don’t include coverage for loss of income or business property. Nor will they cover you for liability or defense costs related to your business. Talk to an agent about adding a rider to your homeowners (or renters) policy or purchasing a separate business owner’s policy.
Myth: I don’t need life insurance because I don’t have children
Fact: If you’re in a partnership where you each earn a salary, things like household expenses and other debts become a financial burden when one salary unexpectedly gets taken away. A life insurance policy can help you and your partner manage your home and stay on track with your standard of living and retirement planning if anything happens to either of you.
Even when you’re single a small amount of life cover will ease the financial burden that your death could place on those you leave behind. It’s also important to protect your income while you’re young with an expected high salary growth. This will safeguard you in case you’re unable to work because of an injury or sickness.