8 Misconceptions About Insurance

Today we look at the 8 Misconceptions about Insurance. Insurance can be pretty confusing at times. Let’s get right into in it.

1. MY SPOUSE WANTS A LIFE INSURANCE POLICY BUT I DON’T THINK IT’S NECESSARY.

• If you have signed up for a life insurance, your life is INSURED
  • DIME 
    • Debt, Income, Mortgage, Education
• Explain Death  benefit or face value of policy ($50,000, $250,000, $500,000)
  • The Death benefit is the amount of money that will be dispersed if you happen to die, become disabled, or be diagnosed with a terminal illness
• Quality of life, things family is accustomed to having, cleaning service etc.

2. I ONLY NEED LIABILITY INSURANCE FOR MY VEHICLE NOT COMPREHENSIVE AND COLLISION.

• Liability insurance covers you and your family if you are at fault in an accident
• Collision coverage will cover costs to repair your vehicle (minus your deductible) in the case of hitting a pothole, car , or other object
• Comprehensive coverage will cover costs to repair vehicle (minus your deductible) If your car is flooded or if you hit a deer, theft, vandalism, or hail
• It is very important think about the potential risks in your area when researching your insurance policy 
• Know the value of your car, this helps when knowing how much C&C to get

3. IF I LEND MY CAR TO A FRIEND AND THEY CRASH IT, THEIR INSURANCE WILL PAY FOR IT.

• Makes sense that their insurance would pay
• Insurance follows the vehicle, not driver
  • Make sure you have permission to borrow the car from the owner of the policy of which the car is insured!
• Your insurer will bear the responsibility of insuring the car
• Once the accident exceeds your policy limits, the other car policy will pay the rest (secondary insurance)

4. I DON’T NEED RENTAL CAR INSURANCE BECAUSE MY CREDIT CARD WILL COVER ME.

• Many credit cards will cover collision insurance only
• You are responsible for the other cars damages if you are at fault
• Sometimes credit card will restrict coverages based on where you travel
• Take time to find out what Is covered 

5. HEALTH INSURANCE IS AVAILABLE TO PURCHASE WHENEVER I NEED IT NO MATTER WHAT.

• Strictly UNTRUE
• Purchasing health insurance in the individual market and off the exchange must be done in OPEN ENROLLMENT or one must experience a life qualifying event
• Got a new job?
• You may have to wait 30-60 days for your company’s insurance plan to take effect and become active
• Have all the information about this readily available 

6. MY HEALTH INSURANCE WILL COVER ALL MY MEDICAL EXPENSES, NO MATTER WHERE I
RECEIVE CARE.

• This is untrue
• Insurers negotiate payment rates with groups/networks of providers
  • GPOs
• Your provider may be OUTSIDE of your network
• In this case your insurance may not pay the whole medical bill
• More out of pocket expenses
• Make sure your provider is in network to avoid crazy bills
• Trust me I KNOW

7. MY STATE’S MINIMUM AUTO LIABILITY COVERAGE IS SUFFICIENT.

• Depending on the accident or claim this may be terribly false
  • Liability Insurance only covers the loss of the other involved vehicle
• Expensive Car, more than one vehicle, death
• Have you checked your policy’s limit for bodily injury?
• Imagine a death caused by your mistake
• Could be millions of dollars in settlements
• In this case you would be responsible for an unbelievable amount out of pocket
• 100/300/100 with $500 Comprehensive & Collision insurance
  • Solid & Sufficient policy to cover both involved vehicles

8. HOMEOWNERS INSURANCE MEANS I’M COVERED FOR FLOODING LOSSES

• Think again
• Flood damage is not a covered provision in a standard homeowner policy
• To have flood insurance you must purchase coverage specific to flooding
• Flood Zone, LAKE, Creek, Pond look into flood insurance
• 30-day waiting period before coverage takes effect