Today, we’re gonna bust some insurance myths! I used to watch a show about 10 years ago called Mythbusters. On the show, these two guys would take these different things that were “supposedly” truthful and determine whether they actually could happen or not. Some of these things happened in movies, and they would just take it and test it to see, is this true? Or was it just a myth?
Well, we’re going to do that about insurance. And the thing that you need to be aware of is that there are a lot of myths out there about your insurance coverage. And suppose you believe a myth about your insurance coverage. In that case, you can be making some really bad decisions about your insurance coverage and then get yourself in a position where you’ve got no insurance coverage at all.
Alright, so let’s break it down. Let’s talk about these different myths that a lot of people believe are true about insurance policies, and they may just not be. I’m going to help you to understand what’s factual or plausible. And what is nothing more than just a myth.
Myth #1: Every Homeowner’s Policy Covers Flood
They DO NOT. almost 100% of all homeowners, insurance policies do not cover floods, they are actually excluded. As a matter of fact, the federal government instituted a program called the National Flood Insurance Program. It’s a division of FEMA, you know, the federal emergency department of the government, you know, that division of the government put into place a flood program to provide insurance in the event that your house is actually damaged by flood. Why? Because the damages were just so large from these events, an insurance company just may not be able to sustain under. So the government had to step in to take care of that as an alternative so that people would not lose their homes and become bankrupt and then have to have to leave their homes to be damaged by the flood.
Myth #2: I Never Had An Accident Or Never Have Caused An Accident, So I Do Not Need Auto Insurance
Well, the fact is, in most states, it’s actually a law that you have insurance because the reality is, we don’t just intentionally cause accidents, right? It’s an accident, and we never know when that will happen. And there are a couple of different reasons why you want to have auto insurance. One of them is because of what the state says. The second is to protect yourself if something does happen. Insurance is there to protect your assets to protect the things that you own, protect your livelihood, protect your family, and protect that security. So you need it for that to protect you if something eventually does happen. Another thing is just that it’s a good thing for you to do, and it’s a way that you can offset those expenses. In the event that something does happen, you have some sort of accident, someone else is hurt, or you damage someone’s property, you don’t have to pay for that out of your pocket. Well, you can offset this by paying a premium per year for your auto insurance. So that if something really bad happens, and you have to pay a couple of $100,000 or even up to a million dollars for some sort of accident, it happens you can offset that and allow the insurance company to take care of it for you.
Myth #3: Red Cars Cost More!
Insurance has got nothing to do with the color of the car, except for maybe that you may have a higher paint job that you’ve done. But that’s got nothing to do with the insurance at all. Whether it’s a pickup truck, a car, or whatever, it doesn’t necessarily matter. It’s more about the performance and then also about your driving habits and then really how much that vehicle is worth. You know, between a car worth $30,000 and a car worth $100,000, the $100,000 car will cost more. Also, your driving records got a lot more to do with that. If you have accidents or ticket violations, that’s going to make your insurance cost more. Another thing is your credit really has more of a bearing on your insurance, whether it’s a red car, blue car, or a white car.
Myth #4: Car Insurance Only Covers Certain Things
It doesn’t really have anything to do with whether it’s just a policy or not it’s more to do with the coverage that you have. If you have comprehensive and collision coverages underneath your policy, then it’ll take care of things like vandalism, whether it’s stolen, whether a tree falls on it, hail damage, it catches on fire or damages due to floods. If all you have is liability coverage, it’s not going to give you coverage for that vehicle at all. Don’t believe just because you bought liability coverage, or you bought an auto policy that is going to give you coverage for these things, you are already protected. You need to make sure that you’ve got comprehensive collision coverage.
Myth #5: My Landlord Already Has Insurance. I Don’t Need One For My Own
The landlord has bought insurance for the building they own, permit, and liability to protect them as a landlord, so that if something is going to happen, and you were to bring suit against them, they are protected, but it does nothing for you. It does not cover you for liability claims at all. If someone comes to your home, they get hurt there. It does not give you any liability coverage at all. If there’s a fire that burns the building to the ground, their landlord policy will cover the building, but you are completely 100% responsible for all your stuff, if you don’t have a renters policy, then all your contents are just up in smoke. So make sure you buy renter’s policy.
Myth #6: All Insurance Policies Are The Same
This is one of the biggest myths out there. Not only that, all insurance agents are not the same either. Different ones are just more educated, more trained, and are going to take the time to make sure that they educate you to help you to understand what you’re buying. Make sure that you buy a policy that you can understand and feel good about that it’s going to take care of you.
At Reed Insurance, We’ve Got Four Promises
The first promise is that we’re going to make sure that your policy does its number one job. Every insurance policy is to protect you and your personal assets to make sure that if something bad happens, you don’t become financially destitute or bankrupt. And it makes sure that your wages aren’t gonna be tarnished for the rest of your life because you didn’t have liability insurance or properly insured, or make sure that your home can be rebuilt. The same thing with your cars, make sure you can get your cars replaced.
The second one is that we make sure that you understand what you’re buying so that you can feel good about it and know that you’re spending your dollars wisely.
The third thing is that we want to make sure that it fits inside your budget and make sure that it’s something you can afford. And that if you need more coverages as you grow, we can help you to make sure that you buy those coverages that you need to protect you again, to fulfill that first promise.
The fourth promise is that we use our math a lot. We’ve got a lot of different companies that we represent. Since we’re an independent insurance agent, we use that ability to make sure that we’re able to meet the first three promises to make sure that we’re finding the best deal for you with the broadest coverage that meets your needs and fits into your budget.
All policies are not the same. In the state of Texas, there are four different types of homeowner policies you can buy, HOA, HOA+, HO3, and HOB. And those are different types of policies, in all other states, there are a lot of other policies that are substandard that you need to be aware of. If you are not aware, and you have not been educated by your agent or by the person that you’re talking to, if it’s an 800 number, you may be buying a very low-end policy or a substandard policy and not get what you think you’re getting.
Well, that’s the insurance myths. I hope that helped you to understand different things about insurance policies that are myths. Some are true, and some are not. Just help me understand the different things so you can make a well-informed decision about your insurance purchase. If your insurance agent is not having these sorts of conversations with you, maybe it’s time for you to find a new independent insurance agent.
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Beaux Pilgrim, CEO