Myths Debunked: Insurance Edition
In my time serving the insurance needs of the metro-Detroit area, I’ve experienced some pretty prevalent misconceptions about obtaining insurance. Two of the primary reasons people tend to avoid buying insurance? Cost and coverage – insurance costs too much and doesn’t cover enough. Let’s investigate some of those myths and see what the truth is.
The expenses tied to obtaining insurance are scary. But there’s good news – most plans are more affordable than you think. Working with an agent to get the right policy for you is critical and can help keep costs low. Let’s look at some myths associated with the price of insurance across different policies.
1. To lower your home insurance premium, you have to cut your coverage.
This is a dangerous idea. Always making sure you and your home are adequately insured should be a high priority. However, there are ways to reduce what you pay in premium on your home insurance – for example, installing a burglar alarm or updating utilities to reflect home updates can be quick ways to get a discount on some plans. Talk to your agent directly about lowering your premium another way.
2. I don’t want to pay for renter’s insurance because my stuff isn’t all that valuable.
The truth: the average renters’ belongings total around $20,000 in cash value. Now picture the worst-case-scenario – a flood, a fire, theft, or so on. Are you comfortable replacing everything you own out-of-pocket? Renter’s insurance is specifically designed to protect your belongings and is surprisingly affordable. The average cost per month for a renters’ insurance plan in Michigan is $34.
3. I can only afford to purchase the minimum amount of auto coverage required by law.
Purchasing the minimum amount of auto coverage required by your state may seem like a good way to save some money, but it comes with a catch – should you be involved in an accident, your losses incurred by the accident will likely fall on you to pay out-of-pocket. In most cases, minimum auto coverage begins at 50,000/100,000 in coverage. The next level of insurance doubles your coverage to 100,000/300,000 for only a few extra dollars per month. So, paying a bit more for better auto coverage initially can save you money down the line. Make sure to talk to you agent about possible discounts to make your plan more affordable.
Okay, we’ve done it – we’ve busted some myths about the cost of insurance. But what about that other issue - the span of insurance coverage once purchased? There are preconceptions about different types of insurance and how well they actually provide coverage. Let’s look at some of them.
1. In case of a flood, my home is covered under my standard homeowner’s policy.
A standard homeowners’ policy does NOT cover flood damage. This is a common misconception. To be protected from floods, make sure to obtain a separate flood insurance policy in addition to your standard policy. Call today to see what information is required for a flood insurance quote.
2. Renters’ insurance doesn’t cover much – only my personal belongings.
Actually, a renters’ insurance policy covers much more than just your belongings. Included in most renters’ insurance plans are liability and medical coverage, loss of use protection, and coverage for property damage. This coverage ranges from possibly paying for any property damage you are deemed responsible for or even injuries to guests in your apartment.
3. When I get my car insurance, my car will be covered from theft, vandalism or weather-related damage.
This is often untrue. Theft of and vandalism or weather-related damage to your car is covered only if you choose comprehensive coverage with your policy. Make sure to discuss this possibility with your agent first – for older cars, this additional coverage may not be cost-effective.
So, while insurance is a tricky thing to navigate, there are ways to make it simple! Whether that’s by discussing discounts on a plan for a lower premium or adding a facet of coverage that works well for you and your life, there are always options.