With my family's insurance renewals coming up, I've spent the past couple of months checking out home and auto coverage from different companies. Interestingly enough, my research points out some myths about insurance that many folks may not know. For example:
1. With all the spring rains, flash floods, and not to forget Easter Sunday's devastating tornado, I can't help but think of consumers who mistakenly believe that homeowners' insurance covers any and all damage. Too many homeowners have taken a beating because they think they're protected from the teeming waters (and torn down homes). Remember: the only insurance that covers "floods" is FLOOD insurance.
2. Just because you've paid your homeowners policy in full doesn't automatically mean you're covered when something happens to your house. Exclusions, special conditions, and other limitations may impact what you will get if you incur a loss. Check regularly with your agent to review your policy to ensure you have the right one based upon your needs and what's inside your wallet.
3. Even assuming one buys "full coverage," this misnomer certainly doesn't mean everything's covered. First of all, there's no such animal as "full coverage" and, in fact, most states mandate only liability insurance. Be certain you select only the coverage you need and can afford.
4. Thinking certain car colors increase premiums is another mistake people make. That cherry red vehicle won't make your payments rise (although if going over the speed limit, you and 'ole Cherry Red may be more likely to get a ticket than Granny Girtie driving her '96 Chevy); however, certain other factors will. The auto's year, the make and model, miles driven per year, the driver's age, driving record, and credit history are all factors contributing to a rate increase, as are other persons also named on the policy.
5. Just because policyholders own an older car doesn't mean we don't need comprehensive coverage. These days, many thieves target less new vehicles; not only are they easier to steal but, additionally, a strong market exists for older parts.
6. A great life insurance plan at work doesn't mean you shouldn't purchase more coverage. After all, if folks leave their jobs, chances are they won't be able to take the coverage with them. It wouldn't hurt to talk to a licensed life insurance professional about buying your own policy, such as affordable term life and, particularly, if you still have children at home to be cared for and educated.
7. Health insurance won't necessarily cover all expenses. After all, even the best policies mean copays and deductibles. This is where a supplemental policy might come in handy, especially for cancer, accidental injury, and so forth. Following a bad accident several summers ago (and at the expense of three weeks in the hospital, three months of outpatient rehab, and lots of pain in recovery), I received a check for $8500 that covered any medical expenses beyond what health insurance encompassed. In fact, I pocketed enough bonus bucks to buy a brand-new iPad for my husband and one for me!
Contact Ellen Phillips at consumerwatch@timesfreepress.com