Insurance Myths Debunked
Insurance myths can be misleading and may cause people to make wrong decisions when it comes to their insurance coverage. According to Steven Harris, a licensed insurance broker, one of the main reasons for these myths is that insurance contracts are written in legal language, which can be difficult for people to understand.
Why Insurance Myths Exist
Harris explained that people often assume they are covered against various losses or liabilities, but they may not know exactly what their policy says. Many people also draw on personal experiences from friends and family and make decisions based on that. This can lead to misconceptions and myths about insurance coverage.
Common Insurance Myths
There are several common insurance myths that people believe. These myths can be harmful and may cause people to make wrong decisions when it comes to their insurance coverage.
Red Vehicles Cost More to Insure
One of the most common myths is that owning a red car costs more to insure. However, according to Harris, there is no meaningful data or correlation to the color of your vehicle. Insurers often rely on data such as the make and year of the car and the driver’s track record to determine the insurance rate.
Comprehensive Insurance Means Full Protection
Another myth is that comprehensive insurance means full protection. However, comprehensive insurance only covers non-collision-related damage such as fire, theft, hail, or water damage. Collision insurance may not be included, and full coverage includes both collision and non-collision damage.
Your Personal Insurance Coverage Covers Ridesharing
Many people believe that their personal insurance coverage covers ridesharing. However, according to Anne Marie Thomas, director of consumer and industry relations at Insurance Bureau Canada, this is not always the case. Ride-sharing apps like Uber and Lyft offer drivers a blanket policy for the duration of the car’s business use, but drivers need to understand which insurance applies in which situation.
Moving Does Not Affect Car Insurance Rates
Some people assume that moving does not affect their car insurance rates. However, according to Morgan Roberts, vice president of RH Insurance, this is not true. Moving to a new area can have a positive or negative impact on your rates, as insurance companies assess risk based on areas and zip codes.
Car Insurance Automatically Increases When You Make a Claim
Many people believe that their car insurance automatically increases when they make a claim. However, according to Harris, this is not always the case. If the driver is at fault, the premium would likely increase. If it’s not the driver’s fault, the fare usually stays the same.
Traffic Tickets Increase Insurance Premiums
Some people assume that traffic tickets increase insurance premiums. However, according to Morgan, this is not always the case. A speed camera ticket will not affect your insurance premium, but if a police officer pulls over a driver, it will affect the insurance premium.
Conclusion
In conclusion, there are many insurance myths that people believe. It’s essential to understand what your insurance policy covers and what it doesn’t. By debunking these myths, people can make informed decisions when it comes to their insurance coverage. It’s also important to read and understand your insurance policy and to ask questions if you’re unsure about anything. By doing so, you can ensure that you have the right coverage and avoid any potential pitfalls.