Insurance industry is complex, and the abundance of information online does not necessarily benefit the consumer who is not able to distinguish between true and false information. Over the years, having insurance has become a necessity in order to ensure the safety of your family and protection of your finances. Our lives, homes, lands, possessions, cars, and other properties are exposed to a variety of risks, which is why having insurance is so important in today’s world. Many people avoid getting insurance or make mistakes when selecting coverage from unreliable sources. That is why our licensed independent agents at Tipton Hill Insurance only work with the most reputable and financially stable insurance agencies when browsing quotes for you. Here are the top eight misconceptions about insurance.
#1. Insurance Companies Offer the Same Policies
While many companies would like people to believe in this statement, in reality it is not true. Insurance is a product, and as with any other product you purchase, the quality varies from company to company. Some insurance companies enhance coverage options in order to provide better claims experience for their clients, while others prefer paying claims only when absolutely necessary. The insurance coverage offered may have the same name, but the experience will be different across different companies.
#2. Insure Your Home for the Same Amount You Purchased It
When it comes to the value of your home, there are two factors to keep in mind. First is the Market Value and second is the Replacement Cost. When you purchase a home, you pay the price according to its market value, but when you purchase Homeowner’s Insurance, you have to consider the costs of rebuilding your home, and not its purchase price. Working closely with your agent will help you cover all the bases.
#3. You Do Not Need Renter’s Insurance
Many people who rent a property believe that if anything happen to their unit, they will be reimbursed by their landlord’s insurance policy. However, while Landlord’s Insurance may offer dwelling protection, the renter’s interests are different. Renter’s Insurance policy carries personal belongings protection, but most importantly, liability coverage in the event a renter causes damage to the property of the landlord.
#4. Your Homeowner’s Policy Covers Valuable Items
While Homeowner’s policy does offer protection for your personal belongings, your valuable items, such as art, jewelry, and other expensive belongings are not covered by the policy. You have to purchase additional coverage in order to ensure protection of those items.
#5. It Is OK to Have a Lapse in Insurance
Having a lapse in insurance is not OK and even against the law in some states. If you let your Auto Insurance lapse, you are left driving without any protection. Moreover, most insurance companies will not sell auto insurance to an individual who had a lapse in coverage, which will limit your insurance options and increase your premiums for the new insurance coverage.
#6. Full Coverage Means Everything is Covered
When it comes to full coverage option on your auto insurance policy, it means that your vehicle has liability protection, along with comprehensive and collision coverage. This does not mean that everything can be claimed on your policy, so make sure you understand your coverage by reviewing your policy closely.
#7. Homeowner’s Insurance Covers Flood and Earthquake Damage
While homeowner’s insurance offers protection against many perils, such as wind, hail, fire damage, theft, vandalism, and others, it does not protect your home in the event of flood or earthquake. These two types of insurance can be purchased separately from your homeowner’s policy, or in some states an earthquake coverage can be added as an endorsement to the policy.
#8. You Can Negotiate Your Insurance Rates
Unfortunately, insurance rates are determined by many factors and are non-negotiable. Every person is different and has different insurance needs, so even for two people with the same coverage the rates will not be the same. Once the rates are calculated based on your credit score, claims history, driving record, location, and so on, you cannot have them changed, unless your insurance company offers some special discount that can adjust the price of your insurance.