Common Insurance Misconceptions – Busted!

 In Archives, Insurance Information

Common Insurance Misconceptions

Find out the truth about these common insurance myths.

Insurance is a tricky business. Many customers think it is a straightforward procedure of buying financial and legal aid. Customers pay a premium, sometimes have to pay a set deductible, and the insurer pays out in certain situations. Even though it sounds simple enough, there are certain misconceptions and even myths surrounding the insurance industry.

When shopping for a policy, those misunderstandings can be costly for clients. Read on for common myths – busted!

Myth No. 1: Buy insurance for a home based on the real estate market value. 

Truth: Coverage should be bought based on the costs to reconstruct the home from scratch. In many areas of the country, rebuilding costs are quite different from the real estate market value. In areas with a weak housing market, it might cost more to rebuild your house than for what you could sell it.

Myth No. 2: Red cars cost more to insure.  

Truth: Car color does not affect insurance rates, and insurance companies don’t use it in their calculation of rates. If you own a red car and speed unnecessarily, you may find yourself getting into more accidents or pulled over by the police more often, though! If you’re a safe driver, feel free to drive any color car you wish.

Myth No. 3: Comprehensive auto insurance covers everything and anything.  

Truth: Comprehensive coverage pays only for certain problems such as car theft, storm damage, animal collisions, and vandalism. Collision coverage helps to pay for car accidents. Only an all-encompassing auto insurance policy can cover your immediate risks.

Myth No. 4: Thieves prefer to steal new cars.  

Truth: Older cars are more highly valued among thieves because the market for their parts is bigger. Furthermore, newer cars have additional theft safety features. If you want to cover car theft, buy comprehensive coverage.

Myth No. 5: I don’t need life insurance.

While life insurance isn’t for everyone, it is certainly necessary for most people. Unless you have no dependents relying on you for financial aid, and can pass on without any debt, you will need to secure some sort of life insurance.

Stumped on where to start to secure the right insurance? Contact the insurance professionals at American Advantage – IFS Inc. to secure a quality insurance policy to suit your needs, budget, and lifestyle! Serving Pewaukee Wisconsin, visit us to get started.

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