Insurance Myths: Popular Misconceptions You Need To Know
Insurance is one of those products that everyone one of us will need to buy at some point. Whether it’s for our cars, our homes or even our lives, I can guarantee you that people will have at least one form of insurance policy.
The thing about insurance is that there are many misconceptions people believe as the truth. Do you have a need to buy insurance for something soon? If so, spend some time reading this blog post first. That way, you can always ensure that you’re getting the best value for money! Here is what you need to know:
Myth: you don’t need life insurance
Well, there is some truth to that statement. Yes, you technically don’t need to buy a life insurance policy. But it’s a good idea if you do! No-one on this great planet of ours can predict the future. All we can do is take steps to lessen the risk of something bad happening to us.
But, even then, nothing we do is without risk. For instance, you could walk on the street and get run over by a bus. As morbid as that sounds, it has happened before. The need for life insurance usually arises when you’ve got dependents to think about.
That means if you have a spouse and children, for example. You’ll need to think about what happens to them should you meet your maker while in the prime of your life.
Quite often, when you buy a house, the mortgage lender will ask you to take out a life insurance policy for the term of your home loan. That way, if you die before the mortgage is paid off, your insurance policy will clear the debt.
One tip I will mention to you about life insurance is this: the healthier and younger you are, the less you have to pay. A policy for someone in their twenties that doesn’t smoke or drink will be cheap. But if you’re in your mid-40s, smoke like a chimney and drink to excess quite often, you’ll have a hefty premium to pay.
Myth: you don’t need car insurance
That sounds quite ridiculous, am I right? The truth is, whenever you drive a vehicle on any public road, you need to have a valid insurance policy. If you don’t, you could end up getting fined, having your car seized or even going to court!
In some countries, it is possible to buy varying levels of car insurance cover. For example, in the UK, you can buy third party fire and theft or comprehensive cover. The latter covers repairs to your car if you have an accident, whereas the former only pays out for claims made by the other parties.
It doesn’t matter whether you drive your car twice a day or once a year. If you plan on driving your pride and joy on public roads, you need to have insurance cover by law. There are some cases where you might not need car insurance. Examples include:
Transporting your car from one location to another on a trailer hooked up to another vehicle;
Driving on private land.
If you buy a car on finance, one of the terms of your agreement is that your car has insurance cover at all times. That’s because the finance company are technically the owners of your vehicle until you’ve paid it off.
Myth: you don’t need insurance for your business
It might surprise you to know this, but there will be some cases where you need insurance cover for your enterprise. For example, if you hire people to work for you, the law says you must have employers’ liability insurance.
If any harm comes to your staff while working, your insurance will take care of any costs resulting from their injuries. Of course, it makes sense to take out appropriate insurance policies if you run a business.
Public liability will cover you if your customers get injured on your premises. Professional indemnity will cover you if a client sues you over something you did wrong. Contents insurance is there in case your valuables get lost or stolen.
Some business owners take out extra policies too. For instance, construction companies might take out plant Insurance at AutoTrader. That way, if anyone breaks into a building site and steals any equipment, they can get them replaced.
Myth: you’ll still be covered if you miss a payment
It’s no secret that many people fall on hard times. The sad truth is that a minority of individuals believe they’ll still have insurance cover if they miss a payment.
The truth is insurance companies are within their rights to cancel a policy for non-payment of premiums. Even if it’s just one payment that you’ve missed. Insurers will always contact you to let you know about the missed payment. That way, you’re given the opportunity to put things right.
But if you ignore their correspondence, they will assume you don’t want the insurance anymore and just cancel your policy. That’s why it is important you check that your insurance payments are up-to-date.
Myth: insurers will reward you for loyalty
There is a surprising amount of people that think you’ll get cheaper premiums just by sticking with the same firm for years! But, the reality of the matter is you don’t. Yes, you might get reduced insurance if you don’t make a claim.
However, in the insurance world, there is no such thing as customer loyalty. Insurers have thousands, if not millions of customers. Existing ones will go elsewhere, and new ones will take their place. That’s just the way companies in the industry work.
Regardless of what it is, if your policy is up for renewal soon, it’s worth getting quotes from various competitors. After all; the last thing you want to do is pay more for your insurance than you need to!
The great thing about the Internet is you can use comparison sites for things like car insurance. So you’ll be able to get many quotes in a shorter period.