Insurance can be a tricky business. Shopping for can feel intimidating because there are so many providers and plans to choose from, so much fine print...and so many misconceptions! Yes, myths abound in the insurance world, and they are perpetuated as readily and colorfully as any fairy tales or legends.
Do you know how to separate fact from fiction when it comes to insurance? Take this quick true or false quiz to discover just how clear-eyed you really are about insurance.
Questions:
- True or False: Because they tend to be pulled over and ticketed for speeding more frequently than vehicles in other colors, red cars cost more to insure.
- True or False: If you do not have any dependents, there is no real reason to buy life insurance.
- True or False: Flood insurance is unnecessary and/or unavailable for people who do not live in high-risk areas.
- True or False: No matter how small the misfortune, it's smart to use your insurance to cover it; that's what you're paying those premiums for.
- True or False: Having an inexpensive vehicle does not necessarily mean you will pay less in auto insurance.
Answers:
- False: While a car's make, model, body type, engine size, and age are all factors in determining the cost of auto insurance, color-no matter how crimson-is not relevant.
- True: The purpose of life insurance is to provide financial security for the ones you will leave behind in the event of your death. If you don't have a spouse, children, or other family members who are dependent on you now for financial security, there really isn't any reason to get life insurance.
- False: Actually, even areas that are not prone to floods may be included in the regions that are covered by the National Flood Insurance Program. Even if you live in a low-risk area, you may be eligible to obtain this type of insurance.
- False: Sometimes, it's smarter to pay to repair something out of your own pocket-a fence post damaged in a storm, a tail light cracked in a fender-bender-than to ask your insurance company to cover it. Insurance is really designed to cover the costs associated with true disasters or major mishaps. If you can afford to pay for a repair or replacement yourself, go ahead and do so; otherwise, you will likely eventually see an increase in your insurance premiums.
- True: While it may seem like a $500 jalopy is the way to go if you want to save money on car insurance, this isn't always the case. True, a cheaper car will require you to pay less for comprehensive coverage, which covers damage caused by weather, fire, vandalism, or accidents involving accidents. But if your old, cheap automobile has a big engine, is a rare model, or weighs a goodly amount, it may be even more costly to insure than a pricier car.
For answers to any other insurance-related questions, contact Schoen Insurance Agency today.
