Tag Archives: Insurance Knowledge

How is Your Insurance Knowledge?

Now that we are into the New Year, take some time to increase your insurance knowledge.  Insure.com recently completed a country wide survey using the following misconceptions:

  • Insurance Myths | Kemner-Iott AgencyI should purchase insurance coverage for my house based on the real estate market value. Your homeowners policy normally insures you home for the rebuilding cost (materials and labor).  This can vary depending on the market in your area.  If the market value is higher than the rebuilding cost, much of the real estate value is in the land.  In today’s housing market, many people are able to purchase a home for less than the rebuilding cost.  This being the case, your homeowners policy will insure for more than the purchase of the home.  By insuring your home at the “rebuilding” cost, you should qualify for replacement cost to cover the expense to replace your home and personal property, instead of “actual cash value” coverage, which will only cover the depreciated value.
  • Red cars cost more to insure because they get pulled over for speeding more.  The color of your car may reflect your personal taste, but it does not have a direct impact on your car insurance rate.  Some of the things that do affect your premium are your driving history, your claims history, your insurance score, and the year, make, and model of your vehicle.
  • If I cause an accident with extensive damages to others, my auto insurance company can cancel me immediately.  The truth is an auto insurance company cannot immediately cancel your auto insurance. However, they have the ability to not renew your policy at the end of your current policy period as a result of too many tickets or accidents.  If a company decides to not renew your policy, they are required to mail a written notice stating the reason for nonrenewal at least 30 days before the expiration of your current policy.
  • Small cars are the cheapest to insure.  Typically small and mid-size SUVs and minivans are less expensive to insure.  An accident with a small car will result in more damage, causing more repairs, as well as more injuries which in turn results in higher insurance rates for small cars.
  • Comprehensive auto insurance covers everything and anything.  Comprehensive includes coverage for damage to your car for broken glass, fire, weather, vandalism, theft and hitting an animal.
  • Thieves prefer new cars.  Car thieves sometimes take newer models to resell them in America with a counterfeit vehicle identification number or ship them overseas.  In truth, car thieves prefer older cars from longstanding model lines such as a 1996 Honda Accord or a 2006 Ford F-150 pickup.  The majority of stolen vehicles go to chop shops.  Because the parts can be used on a variety of models, this makes older vehicles popular with thieves.
  • If my friend borrows my car and has an accident, their insurance will pay for the damage. Your friend’s insurance will not pay for the damage to your car.  Your insurance pays when someone else drives your car.    If you do not carry coverage for physical damage to your vehicle, you most likely will be left with a damaged vehicle.
  • The Affordable Care Act requires me to take the health insurance plan offered by my employer.  The ACA requires almost all Americans to purchase health insurance but doesn’t say where they must get it.  However, if you choose to purchase your own health insurance, you will not qualify for a subsidy.
  • My out-of-state speeding ticket will not follow me home.  This information will follow you and can result in points on your driver license.  In addition, your unpaid speeding ticket in Florida will prevent you from renewing your license in Michigan.

When you have insurance questions, refer to a credible source.  Insure.com is an online source you may find helpful.  By contacting your insurance agent, you will be able to get the answers to your questions as well as making any necessary changes in your existing coverage.

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