What are the 10 myths? We thought we would share them below.
Myth 1: I should buy insurance coverage for my house based on its real estate market value.
- 52% think it’s true (45% women, 55% men).
- Reality: Buy coverage based on a home’s cost to reconstruct (materials and labor).
Myth 2: Red cars cost more to insure because they get pulled over for speeding more.
- 46% think it’s true (52% women, 48% men).
- Reality: Car color doesn’t affect insurance rates.
Myth 3: If I cause a crash with extensive damages to others, my auto insurance company can cancel me immediately.
- 44% think it’s true (50% women, 50% men).
- Reality: If an insurer wants to drop a customer due to claims, it generally has to wait until the policy period is up.
Myth 4: Small cars are the cheapest to insure.
- 40% think it’s true (42% women, 58% men).
- Reality: Small and mid-size SUVs and minivans are generally the cheapest to insure. Small cars are not, often because they’re chosen by more inexperienced drivers who tend to make claims, and because passengers incur more expensive injury claims.
Myth 5: Your personal belongings are insured by your apartment complex/landlord’s insurance policy.
- 36% think it’s true (42% women, 58% men).
- Reality: Unless you have a renter’s policy, you are not covered. Your landlord or apartment complex only insures their financial interests, which are the physical building they own, not your “stuff.”
Myth 6: Comprehensive auto insurance covers everything and anything.
- 32% think it’s true (41% women, 59% men).
- Reality: Comprehensive coverage is tragically misnamed. It covers only narrow portions of possible problems, including car theft, storm damage, animal collisions and vandalism.
Myth 7: Thieves prefer to steal new cars.
- 29% think it’s true (42% women, 58% men).
- Reality: It’s more lucrative to steal old cars and sell them for parts.
Myth 8: If my friend borrows my car and crashes it, their insurance will pay for damage.
- 25% think it’s true (48% women, 52% men).
- Reality: You and your insurance are on the hook when someone else drives your car.
Myth 9: A homeowner’s policy covers your home in the event of a flood
- 19% think it’s true (49% women, 51% men).
- Reality: Flood insurance is only offered by the Federal Government through the National Flood Insurance Program (NFIP). An independent agent can sell you a policy, but they are simply selling on behalf of Big Brother. Check out more flood insurance FAQ
Myth 10: Out-of-state speeding tickets can’t follow you home.
- 13% think it’s true (34% women, 66% men).
- Reality: Oh yes, they can.
“These misunderstandings can lead to financial loss.”
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