Insurance misconceptions can cost people thousands of dollars, so use this article to help you decipher fact from fiction.
One would think that because we live in the age of information, deciphering fact from fiction would be simple. But, thanks to the flaws of the human brain and a condition that psychologists call “confirmation bias,” it is now easier than ever to find false information and believe it to be true. (See flat-Earthers, for one example).
How can it cost thousands of dollars? If you think you are covered for an incident and that incident happens, you will be on your own to pay for all the damages.
But you have come to this article because you care about what the facts have to say. Here are the most common insurance misconceptions you should stop believing.
- “Homeowners Insurance Covers Flood Damage.”
Among the most common beliefs is that home insurance covers flood damage. This is a falsehood; you actually need flood insurance to be protected from flood damage.
- “Umbrella Insurance Covers Everything.”
Umbrella insurance can cover you for a lot, but only up to a certain limit. If you get into a particularly big accident, you could be sued past your coverage’s limits. Make sure that your umbrella insurance policy’s limits meet all of your needs.
- “Insurance Renewal is Not Necessary.”
When your insurance is up for renewal, make sure that you go over your policy and make changes that correspond to your updates. If you got a new kitchen and bathroom, the value of your house likely increased. That means you should update your insurance policy to cover your refurbished home, otherwise, you won’t be fully covered.
If you still don’t believe us, you can always read your insurance policy to make sure.