Insurance can be difficult to understand and there are many common myths floating around today. This list should help you separate fact from fiction in the insurance world!
· Myth #1 – Your landlord’s insurance policy will cover all of your stuff.
While your landlord’s policy should cover structural damage, you will most likely need renter’s insurance to cover your personal belongings. In the event of a structural damage to your apartment, the structure should be repaired by the landlord’s policy, but any of your personal goods that are lost or damaged will need to be covered under a separate renter’s insurance policy in order for them to be replaced.
· Myth #2 – Your red car will cost more to insure.
The color of your car will not affect your auto insurance premium. Instead, other factors like the make, model, and safety features of the car as well as your credit history, your driving record, and your location are used to determine this cost.
· Myth #3 – If your stuff is destroyed, you will receive new items as a replacement.
Unless you have Replacement Cost coverage, you will only recoup the value of the destroyed item at the time of the damage. For example, if your TV is 5 years old and is destroyed in a fire, you will receive the actual cash value of this used item instead of a brand new replacement. If you have Replacement Cost coverage, you will be given the value to replace your destroyed TV with a new one.
· Myth #4 – If your car is damaged, your auto insurance will automatically cover a rental car.
Rental reimbursement is an optional coverage that must be selected in addition to your auto policy. It is a common belief that you will be covered for a rental car if your car is damaged, but this is only the case if you have added rental reimbursement to your auto policy.