5 insurance myths: Facts or Fake?

To get the best insurance policy you must know about some facts. Before purchasing the insurance policy you must know about the factors that affect your insurance policy and types of coverage under different insurance policies. There are five common insurance myths about life insurance, health insurance, car insurance, business coverage, homeowners insurance that you must know.

1. Young people do not need life insurance

It is a common insurance myth that young people do not need life insurance. Some people believe that purchasing life insurance is only an expense at a young age. Young age is the best time to purchase life insurance. Young people can get the cheapest life insurance policy. 

2. Red cars cost more to insure

It is a common insurance myth that red cars cost more to insure. But it is not the truth, because the color of the car has nothing to do with the rates of car insurance policies. The cost of the car insurance depends upon the type of car, price of the car, make and model of the car not on the color of the car. 

3. Car insurance would not cover you if you cause an accident

It is a common myth that your car insurance policy does not cover you if you cause an accident. But you need to understand that type of coverage under the car insurance policy. You must ask your car insurance agent about the details of coverage included in your car insurance policy. Different types of coverage cover the different types of damages. You should select the types of coverage according to your requirement after a proper understanding of car insurance.

4. Homeowners insurance always protects the valuables

It is a common insurance myth that homeowner insurance always protects the valuables. There are limitations on high-value items. The homeowner does not protect all the valuables such as detached property, jewelry or collectibles are not covered under the homeowner’s insurance.

5. People who work from home do not need to purchase business coverage

It is a common insurance myth that people who work from home do not purchase business coverage but need to purchase homeowners’ insurance. But if you have a homeowner’s insurance policy then you can purchase small business insurance to cover your car if you use it for business purposes.

Others insurance myths

Following are the other insurance myths that you must know:

1. Use life insurance as an investment vehicle

It is a common myth to use life insurance as an investment vehicle because life insurance is not an asset. Life insurance provides financial protection to the policyholder. The insurance company pays the family after the death of the life insurance policyholder.

2. Life insurance company automatically pay after the death of the policyholder

It is a common insurance myth that life insurance companies automatically pay to family members after the death of the policyholder. But to get the payout family members need to claim file with the life insurance company. The process of filing a life insurance claim varies from company to company.

3. The life insurance company can increase your insurance premiums

Some people believe that a life insurance company can increase the cost of life insurance policy with your changing age and health. But it is not true when you purchase a life insurance policy then life insurance company charges insurance premiums according to your age and health at the time of purchasing life insurance policy.

4. Your credit has no effect on your car insurance policy

It is a common insurance myth that credit scores have nothing to do with car insurance premiums. Car insurance companies assess the credit history of the driver before calculating the car insurance premiums and charge car insurance premiums according to the credit scores of the driver.

5. You only need to purchase minimum liability insurance

Some people believe that it is enough to purchase minimum liability insurance. But you should purchase more than minimum liability insurance required by law to protect your assets. 

6. Men always pay for car insurance more than women

It is also a common insurance myth that car insurance companies charge more from men drivers than women drivers. But car insurance companies look into different factors such as driving record, age, credit score, type of coverage you need, type of car you drive, etc to decide your car insurance premiums.

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