Something you may not have know about us is that we have the gift of predicting the future.  Here is your future…most of you will have an accident or need to file an insurance claim at some point in your life!  Taadaa!

Consequently, this guide is preparing you for that day.  More of your claims will be covered by understanding these common misconceptions about home and auto insurance and making sure you have adequate coverage.      

Common Insurance Myths

Auto Misconceptions:

Myth: If I have Rental Car endorsed on my policy, that means it will pay for a rental car if mine breaks down.

Fact:  The rental car endorsement only covers you for a rental vehicle if your own car is involved in a claim and your vehicle will be in the shop due to repairs as a result of that claim. Unfortunately it will not pay for a rental car on vacation, or for another vehicle for you due to mechanical issues with your own vehicle.

Myth: If my property damage limit is $25,000 and I cause a catastrophic accident, I am not responsible for anything beyond $25,000.

Fact: Just the opposite, you are responsible for the damages that exceed the $25,000! Which is why we highly recommend higher property damage limits!

Myth: Your car is stolen, vandalized, damage by falling tree limbs, hail or fire, therefore, your insurance will pay for it.

Fact: Eh…not quite.  Did you purchase comprehensive coverage with your policy?  That coverage is required for these claims to be paid.

Myth: “Full Coverage” covers everything!

Fact: First of all, remove this words from your vocabulary.  The blanket statement of “full coverage” can easily be misinterpreted.  What most people refer to as “full coverage” is only comprehensive and collision.  Consequently, coverages like roadside assistance, rental car coverage, accessory coverage (think stereos and lift kits) are covered on separate endorsements that can be added.

Myth: My Friend borrowed my car and was in the accident; that means, they are responsible for the damages.

Fact:  Think twice.  Repeat after me: “If I loan out my car, I loan out my insurance”.   If your friend is in an accident, YOUR insurance will be responsible to pay the damage, as well as, you will be on the hook for any deductible.

 

Home Misconceptions:

Myth: If my sewer line is damaged, where it’s connected to the main city line, my home insurance will pay for that.

Fact: It will not! But you can purchase a separate policy to cover water and sewer lines outside the structure and underground in your yard.

Myth: My home insurance will pay for anything that happens, therefore, I have no worries!

Fact: Home policies have exclusions.  Flood and earthquakes are never covered, so they require specific policies.  Also, homeowner’s have the responsibility to upkeep their home, therefore damages for wear and tear (aka leaky roof) are not covered.  *Ask our Account Managers about Home Warranty options!

Myth: The dwelling coverage (aka Coverage A) is based on the purchase price of your home.

Fact: Your dwelling coverage is based on the cost to rebuild your home; excluding the land.  The square footage, specifics of the structure and current market prices of building materials determines the pricing.  It’s important to find out if you have replacement cost.

Myth: My Property will always be replaced.

Fact: False. Claims must meet criteria before the claim is approved and property is replaced. The claim needs to be accidental and by a covered loss. Let’s review an example:  If a house claim is filed because of mold, which came from water coming into the house, which came from an old roof – it is likely the claim would be denied.  It could be argued that the damage was deliberate as the roof was not adequately replaced to prevent the damage. This would fall under “wear and tear” and the insureds responsibility is to maintain the property.

Myth: If I am a renter, the landlords policy covers everything, hence, I don’t need property insurance.

Fact: No! The landlords policy will not cover personal belongings in the unit; or the renters liability if someone is injured in the space. Renters buy Renters Insurance.  *Guess who offers Renters Insurance for less than 4 Starbucks coffees per month…you got it.  Call your Account Manager for quotes and bundle with your auto for savings.

Auto:

-Have a safety kit in your car with necessary items for injury and even light damage!

-Be sure you know your policy and coverage, to be sure you will be correctly protected.

-Have your ID Card present which has the policy and claim numbers.

Home:

-It would be smart for a Homeowner to keep a bag readily available with essentials that will be needed in case of an emergency/evacuation.

-Be sure you know your policy and coverage. Talk with a specialist to know you are correctly protected & have your policy number and claims number readily available.

-Important for policyholders to contact their insurance to see what plans they have in place like wildfire protection programs.