As you begin thinking about the purchases or life changes you’ll make in 2015, you may be thinking about the insurance you’ll need as well. But many people have misinformation about insurance. Insurance can sometimes be misunderstood, and it can be a complicated topic.
It’s important to be educated about the different types of insurance out there, but sometimes it can be difficult to distinguish the truth from myths. Here are a few common myths we hear all the time:
- “I don’t have that much stuff, so I don’t need renter’s insurance.”
- A lot of people think they don’t have enough stuff to make buying renters insurance worth it. Go around your apartment or rental home and take stock of all your items, including furniture, appliances, electronics, clothing, towels and more. Everything should be counted, even the food in your kitchen. After you do this, you’ll probably be surprised at just how much you could lose in the event of a natural disaster, fire or theft. Even if you don’t own very expensive items, you can get back on your feet faster when you have renters insurance to compensate for your losses.
- “Only rich people need umbrella insurance.”
- Many people believe that umbrella insurance is only for the wealthy, as it gives significant coverage (usually over $1 million) for liability lawsuits. Umbrella insurance adds additional liability coverage to existing policies, such as auto or home insurance. The fact is, anyone can face a liability lawsuit, but not everyone has enough insurance to pay for one. If you’re legally responsible for someone’s losses, injuries or death, there’s a chance you could be sued for more money than a standard insurance policy will cover. Umbrella insurance is a cushion everyone can use to get peace of mind when the worst happens.
- “I’m a homemaker, so life insurance won’t benefit my family.”
- Life insurance is a dynamic product that can help support the entire family, not just those who earn money. A life insurance policy can help cover the costs from a lost salary, childcare, food, transportation, housekeeping, mortgage payments and more. When you buy life insurance, you can be sure that your family continues on with a similar standard of living.
- “There is no financial risk to going without health insurance.”
- Not having health insurance is the leading cause of bankruptcy. Most families can’t afford to pay for medical care out of pocket.
- “I don’t need flood insurance if I don’t live near the water.”
- Flood insurance isn’t required in some areas, so you may believe you don’t need this protection if you don’t live near a body of water. Even if you don’t life in a flood plain, it’s a good idea to carry flood insurance. Flooding can happen anywhere, whether you live on the ocean or in the desert. Things like hurricanes, strong rains or problems with water systems can cause flooding, no matter if you live near a large body of water or not.
- “A red car will cost more to insure.”
- No one knows exactly how this myth started, although it may be due to the bright color of red cars standing out in traffic. It could also be that scientists have proved that color has a direct effect on mood. The truth of the matter is that owning and insuring a red car will not cost you any more than insuring a blue or green car. What will affect your auto insurance premium is your diving history, the age of your vehicle and the make and model of your car.
- “Disability insurance isn’t necessary, because Social Security will pay me.”
- While Social Security can help people who are disabled, it may not be able to meet all your needs. There are also strict qualifications to meet before you can receive disability benefits through Social Security. This is why disability is so important. Disability insurance can be used for long-term or short-term disability, unlike Social Security, and it will kick in immediately after you become disabled to replace lost income.
- “I’m young and healthy, so I don’t need health insurance.”
- People who are you and without serious health problems may not prioritize health insurance coverage. While you may note need many aspects of health insurance coverage, like prescription coverage or maternity care, you should still consider carrying a basic health insurance plan. This will protect you from outrageous costs if you happen to have an accident or get diagnosed with a serious illness.
- “Long term care insurance is only for the elderly.”
- Most people think long term care insurance only covers nursing home expenses for the elderly. However, it can also be very beneficial for younger people. It can help cover costs from an accident if you need rehabilitation. It can also help cover the costs of an illness that puts you out of work for a long time. Purchasing long term care insurance can help you save money, even if you have a good health insurance plan.
- “If I have homeowners insurance, all my belongings are covered automatically.”
- Some homeowners assume their homeowners insurance covers the entire house and everything in it. Unfortunately, it’s not that easy. You may need to go through a process called “scheduling” to get all your items covered – which typically requires an inventory and description of all the items you own. Higher-value items, like electronics and appliances, will need to have the serial number included. To ensure you get reimbursed for your losses, keep an ongoing list of all your belongings. Take pictures of your things and remember to include details like serial numbers or receipts when you go through the scheduling process with your insurance company.
These are just a few myths related to insurance. Luckily, E.M. Ford & Company offers each of the coverages listed above. To be fully protected from life’s unexpected surprises, call our office to take advantage of the products available to you and your family.