Insurance Myths

Good article out of the Insurance Journal written by Andrea Wells.

10 Insurance Myths.

Insure.com said it recently surveyed 2,000 adults, half women and half men, from all regions of the country, asking them whether 10 insurance-related statements were true or false. All the statements were false.

Insure.com also looked at who is more likely to believe a myth, men or women. In all cases except two, men were more likely to be duped by an insurance myth.

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 its true (42% women, 58% men). Reality: Small and mid-sized SUVs and minivans are generally the cheapest to insure.

Myth 5: The Affordable Care Act allows health insurance companies to base rates on medical conditions such as high blood pressure, heart disease and cancer. 36% think it's true (42% women, 58% men). Reality: The Affordable Care Act prohibits health insurers from basing rates on pre-existing conditions.

Myth 6: Comprehensive auto insurance covers everything and anything. 32% think it's true (41% women, 59% men). Reality: Comprehensive coverage 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: Your insurance pays when someone else drives your car.

Myth 9: The Affordable Care Act requires me to take the health insurance plan offered by my employer. 19% think it's true (41% women, 59% men). Reality: The ACA requires almost all Americans to buy health insurance, but doesn't say where they must get it.

Myth 10: Out of state speeding tickets can't follow you home. 13% say it's true (34% women, 66% men). Reality: Yes, they can.