Insurance is necessary to protect you in today’s world, but it’s not always easy to understand. In fact, there are many misconceptions about insurance, whether it be auto, homeowners, or life and disability. Here are some answers to a few common insurance myths. We hope this helps.
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 be more expensive for new vehicles, even with a new vehicle discount applied.
Myth: If your car is totaled in an accident, you’re off the hook for car payments.
Fact: Actually, a vehicle’s value depreciates quickly and your car can sometimes be worth less than what you owe on it regardless of worth.
Homeowner 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 stuff is destroyed 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 fully cover the cost of buying a new one.
Myth: Homeowner insurance only needs to cover the market value of your home.
Fact: 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 insurance. With the current inflation on parts and labor prices, it’s a good idea to have your policy updated.
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.
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 (for example, 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 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.
Myth: Working with a direct insurance company is always cheaper than going through a local agency such as Unity Insurance or Heller Kowitz Insurance Advisors.
Fact: Although direct insurance companies can save money on agent commission fees, that doesn’t necessarily mean they pass those savings on to you. Many direct auto insurance carriers put those savings back into marketing their products. In the meantime, agencies such as Heller Kowitz often have access to multiple carriers so they can shop the market on your behalf to not only get exceptional coverage but at the best price.
If you have any questions or concerns about your insurance policy, feel free to reach out to Unity Insurance at hello@unityinsurance.co OR Heller Kowitz Insurance Advisors at insurance@hellerkowitz.com