Busting Common Insurance Myths You Thought Were True
Insurance is important for financial stability and protects us from various unexpected life events. However, there are several insurance myths that have been accepted as truth through the years. Believing these myths could result in inadequate coverage or cause you to face an unexpected crisis or loss that could have been prevented. Today, we will explore these common misconceptions and shed light on the issues that can easily lead to costly mistakes while debunking these five common insurance myths.
Myth: “I’m young, so I don’t need life insurance.”
Reality: “There are only two things certain, death and taxes.”
Therefore, assuming that since you are young, you couldn't possibly face death is a myth that can lead to disaster. In reality, life insurance is essential at any age, as it provides protection for your loved ones, all with lower premiums when you are young. This can offer peace of mind, allowing you to provide for your family in the event that something unexpected happens. Astoundingly, of the average 6,850 people who die each and every day in America, 3,292 will die without any life insurance at all. Still, another 1,445 will die with some but not enough coverage. Therefore, according to these stats, 48% of people die without any or adequate protection.
In addition, the cost of burial and end-of-life expenses have only increased. This means that many families are facing unexpected expenses related to a death, on top of grieving their loved ones. Therefore, it is immensely important, even if you are considered “too young” to be at risk for death, to have this protection in place to guard your family against the heartache and financial strain that comes along with death, expected or otherwise.
Myth: “Auto insurance only covers accidents.”
Reality: Auto insurance does include coverage in the event of an accident.
However, in regard to comprehensive coverage, auto insurance also provides coverage against theft, vandalism, and more. It is way more than just protection when on the roadways. In fact, it protects your vehicle from a wide range of scenarios. Your car can be stolen, you can run into a tree, you can have a tree fall on it in a storm, or suffer hail damage. All these situations can cause thousands of dollars of damage and leave you without a way to get to and from work. Therefore, having auto insurance is vital even if you are the most careful driver imaginable, as sometimes things happen, even when you aren’t in or driving your car.
Myth: “Renters insurance isn’t necessary; my landlord’s policy covers me.”
Reality: Renters insurance protects your belongings and provides liability coverage, unlike your landlord’s policy.
It’s a smart investment to safeguard your personal possessions and defend against potential liabilities. Your landlord’s policy will often cover the structure you live in. However, it will not cover your belongings that are within. If you aren't sure if you need renter’s insurance, ask yourself if you could replace everything in your rented home or apartment with what you have in savings. Could you replace each piece of furniture? All your jewelry, clothing, collectibles, gaming systems, electronics, and more? If you couldn’t afford to do so, then you need this type of coverage as you currently are operating without any protection.
In addition, you need protection against a lawsuit as well as this simply isn’t provided as part of your landlord’s property coverage. So, you could face a lawsuit if your dog bites someone, if you invite someone into your apartment and they trip and fall or if a party gets unruly on the property. Therefore, even though your landlord might have coverage on the structure itself, you are far from protected if you don’t have your own renter’s insurance policy.
Myth: “Homeowners insurance covers flood and earthquake damage.”
Reality: Standard homeowners insurance policies do not include flood and earthquake coverage.
You need separate flood and earthquake policies. This additional coverage is vital for anyone. However, it is especially important if you live in areas prone to these natural disasters. In fact, some locations are so prone to flood damage that lenders will demand that borrowers purchase a flood policy. In addition, for anyone living in a seismic area, earthquake coverage can prove to be well worth the investment. Don’t assume a regular homeowners policy will protect you if your home is damaged via a flood or earthquake.
Myth: “Comprehensive health insurance means no need for disability insurance.”
Reality: Disability insurance offers income replacement during disability, while health insurance covers medical expenses.
Having both types of coverage ensures that you have complete financial protection in case of unforeseen health issues. In other words, while health insurance is a good first step, it doesn't protect you fully in the event that something happens if you become injured. Disability insurance, on the other hand, can provide you with enough provisions to get through the healing process and back on your feet again.
Without disability coverage, many people have faced financial ruin simply because they were injured, hurt, or ill and were unable to work for a time. We all want to be able to provide for our families and earn a living. However, there are some situations, such as illness or injury, that make this impossible. Therefore, you should never assume that your health insurance is enough to keep you from financial ruin, as only disability insurance can also provide you with lost wages and help you be able to pay for groceries and keep the bills caught up throughout your recovery. It is a step beyond and offers more comprehensive protection than health insurance alone.
Know the Truth, Not Myths
Knowing the truth about insurance myths empowers you to make informed decisions for better financial protection. Trust Arnold Insurance and its experienced agents to guide you through your coverage options and help you discern what coverage is essential for your overall well-being and financial security going forward. Contact them today to learn more.