10 Insurance Myths Debunked

Nov 9, 2022 | Personal Insurance

Insurance has a lot of technicalities and rules. It can be overwhelming and confusing to first-timers, and make your insurance journey a little bumpy. Insurance is something that everyone needs, but since people tend to shrug off anything that they don’t understand, they neglect getting insurance for themselves. Today, we came up with a list of the Top Ten Insurance Myths 

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Before Getting Insurance

You can do yourself a favor and read a little about insurance. There is a lot of information about insurance available online. Again, it can get overwhelming so just pick out the basic ones, so you’ll have a head start before talking to your insurance agent. Your insurance agent will help you understand what you’ve read online. An agent will help you decide on the coverage of your insurance, and make the most out of your budget to save money.

There are lots of insurance companies you can look up online. It’s better to find a good one in your area. It’ll make the processes easier once you file claims and go down there for other paperwork needed. 

Why is insurance necessary? Due to the unexpected nature of life! Avoid being caught without defense. The moment has come to ensure your family’s safety. It’s time to consult an insurance professional.

Insurance Myths

Having many resources to study insurance is a good thing. Knowing which is true and which is not is something else. With all this information about insurance, first-timers may have a hard time differentiating which is which. Some stereotypes regarding insurance aren’t true, and here’s a list of some of the insurance myths:

Two agents keep each other competitive, making it better for you. 

This one of the insurance myths could cause lapses in your insurance coverage. It is double the effort that could result in coverage gaps. There are certain coverages that are included in the two insurance policies. Having two agents would create a conflict regarding who will organize your insurance coverage. One agent is more effective and less confusing in arranging your insurance policies. Especially when you have auto insurance policies, as there are certain coverages there that may be included in your other policies.

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Getting a low premium is the best option; one of the insurance myths.

Insurance premiums are the cost of your insurance coverage. Insurance companies charge you these premiums depending on your insurance policy, coverage, age, and other factors. In term life insurance, where you can renew your insurance yearly, the premiums tend to be lower when you are at a young age. As you renew your term life insurance every year, the cost of it increases too. Getting a lower insurance premium does not mean that it is the best option for you. It may mean that there is some coverage that isn’t included in your policy. People tend to go through insurance agents or brokers to get a lower premium.

The Internet is a great place to get insurance deals.

As we enter the digital age, most of the information we need is on the Internet. We tend to think that everything on the Internet is true and that it’ll answer the questions that we have in mind. The thing is low-priced internet insurance gives you the impression that you can select and customize your coverage that will suit your lifestyle. In reality, this online insurance coverage is very limited.

Umbrella insurance applies only to high-net-worth companies or individuals.

Your insurance policy has its limits. When going on a trip, you always have your pocket money and some extra allowance in case something happens. Umbrella insurance works the same. If you have exhausted the limits of your auto insurance or homeowners insurance, it is good to have extra insurance. Some people look at it as an extra expense. Umbrella insurance covers a lot more than the standard policy. It ranges from medical bills, legal defenses, and expenses when an accident happens. If you think that you’ll be dealing with these in the future, umbrella insurance will surely help you.

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The Medical Payment part of my home insurance covers injuries that happen to my family and me.

This part of your insurance coverage will help you deal with the finances of an injury, that’s right. But it does not only apply to you and your family. In the event that anyone other than your family and you get hurt, they will be covered by your homeowners’ insurance, too. As long as it happened on your property.

All my guns and jewelry are automatically covered by my homeowners’ policy.

To keep the coverage affordable, insurance companies put a limit on the amount of coverage that policyholders get for such items. The insurance company will only pay up the loss up to its limit. You have options to still have everything covered, and have a talk with your agent for appraisals and schedules. 

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Flood insurance is only for people who live in a high-risk area

Consider global warming as an example. One can’t tell what is going on with our environment nowadays, and can’t surely tell how this will affect your area. Defining flood as groundwater that comes into your home from the outside, indicates that it can be happy to almost anyone. It won’t hurt to prepare. It’s a small price to pay to protect your home and your assets.

Disability Insurance is unnecessary. I can get Social Security.

It would not hurt to get a little extra for yourself. Social security requires application, approval, and waiting time. Accidents don’t wait, they can happen anytime. Getting disability insurance would cover almost everything you need since it is specifically for you. Social security could be your extra help if you think it is worth the wait considering its requirements.

There isn’t anything I can do to manage my insurance costs except shop prices. 

Insurance is essential to each individual. It can be pricey, but there are lots of ways to lower your insurance costs aside from shopping around. Here are some ways to do so:

Higher deductibles

These serve as your initial payment. By paying a higher, one-time, deductible you get to substantially lower your insurance cost.

Good credit

It is normal for insurance companies to do a background check on your insurance claims history. This could affect the cost of your premiums and as well as determine what coverage you need. Check your credit record regularly to be on top of it. Look for discrepancies and have them corrected right away. One basic way of maintaining good credit is by paying your bills on time and keeping your credit balances low as much as possible.

Safety program at work site.

There are insurance companies that offer special discounts for group policyholders. You can ask your employer about groups and clubs if you are included in any to reduce your insurance cost.

Compare insurance costs

Car insurance premiums are based on a lot of factors. The price of the car, repair costs, and overall safety are some of the considerations that insurers look at. Discounts are mostly given to cars that have features that lessen the risk of injuries or theft.

Secured home and office

Consider adding monitored smoke and security alarms to your home as this will reduce the cost of your homeowners’ insurance cost.

Other discounts

Most insurance companies offer other types of insurance discounts. Some use it as a reward after taking a defensive driving course, some also offer a lower rate for young, qualified drivers. Don’t hesitate to ask about these extra discounts. Things such as having low mileage, having more than one car, or being with the same insurance company for a very long time! Insurance companies prioritize their policyholder’s interests and would want to keep them for as long as they could.

There is no reason to insure a stay-at-home spouse.

Being a stay-at-home spouse is a 24/7 job. They may not earn as much income compared to those who are working. But consider the tasks that need to be done to keep the household running; meal preparation, housekeeping, and child care. And all of these are done by only one person. Without a spouse, these tasks would be a challenge on top of your regular day job. Not to mention, it could cost a hefty price, too. Getting life insurance for your stay-at-home spouse saves you from hiring help to do these tasks.

We can help you!

These are just 10 of the insurance myths or misconceptions about insurance. The Internet is a very wide collection of information, it is best to be wary of what is true and what is not. Strengthen your knowledge about insurance by doing your research online. We’re to help you understand your policy. Feel free to book an appointment with one of our insurance experts today here at Advantage Insurance Solutions here in Denver, CO.

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