Insurance Myths: Setting the Record Straight

March 15 is Everything You Think Is Wrong Day. We’re not sure how or why it started, but we’re going to celebrate anyway because it seems like a good time to address some widespread insurance myths. Jennifer Lamphere, one of our vice presidents, has generously volunteered her time to set the record straight on some common insurance myths.

 

Insurance Myth: Red cars cost more to insure because they get pulled over for speeding more. 

 

This one always cracks me up. [The myth] really got started because most high-powered sports cars were red, and yes, the high-powered sports car cost more but not because of the color. 

 

Insurance Myth: Comprehensive auto insurance covers everything and anything.  

 

This is not necessarily a complete myth but is definitely too broad. Comprehensive coverage basically means “anything other than collision.” The most typical claims that fall under “comprehensive” are animal-related accidents, windshield breakage, weather damage (trees falling on vehicles, or hail damage), fire, and theft.  

 

Insurance Myth: If my friend borrows my car and crashes it, their insurance will pay for the damage. 

 

Insurance follows the titleholder of the vehicle. No matter who is driving, the titleholder is financially responsible (meaning their insurance will be billed) for any damage it may cause. 

 

Insurance Myth: Out-of-state speeding tickets can’t follow you home. 

 

MVR [Motor Vehicle Record] systems are sophisticated enough to pull those out-of-state tickets now, so this may not always be the case. 

 

Insurance Myth: High-tech safety features will save you money on insurance. 

 

This one is a little gray, as having security systems on the vehicle—airbags, anti-lock brakes, automatic shut-down systems, etc.—can give you some discounts on your insurance. 

 

Insurance Myth: The smaller the car, the less it costs to insure. 

 

This is just not true as a rule. Yes, a smaller car is generally less expensive, as are its replacement parts, so it may be less expensive than an SUV. But that may not be the case for all small cars. 

 

Insurance Myth: I’m single, or married with no children, so I don’t need life insurance. 

 

This is a big one!  Being single doesn’t exclude your need for life insurance. For one, if you are single, you most likely still have debt out there that would need to be paid if you were to pass away (mortgage, car, credit card debt) and that would be left to your surviving family if you didn’t have a life insurance policy to pay those back. They won’t just go away. And being married without children only intensifies those needs as your spouse is now also dependent upon your income as well.  Another reason to get life insurance while single or childless is that, generally speaking, you are younger at those stages and locking in a rate at a younger age for a specified term is very affordable. 

 

Insurance Myth: I have a comfortable amount of savings, so I don’t need life insurance. 

 

Again, that may be the case, but life insurance is an added benefit to those who have healthy financial situations, not a detriment. Life Insurance income to a beneficiary is tax free, where passing on savings to a loved one would be subject to taxes. 

 

If you have questions about any of these myths, Jennifer and the rest of our agents are happy to answer them. Just give us a call at 270-554-2105.