Insurance can be complicated, that’s why it’s important to learn as much as you can about your insurance coverage. Don’t let misinformation or disinformation lead you to inappropriate decisions — the more you know the better you can prepare. Take a look at the following questions and see if you can determine which are true and which are fiction:
- True or false: Red cars cost more to insure. Insurance companies will likely not even ask the color of your car when they’re calculating your insurance premium. They’re interested in the year, make, model, body type, engine size, age of your vehicle, where you live, your driving record and the like. Red won’t cost you more green.
- True or false: Raising your deductible lowers your premium. By requesting a higher deductible — the portion you pay before your insurance coverage kicks in — you can typically lower your premium. For example, you may consider going from a $500 deductible to a $1,000 deductible. But before you do, make sure you have the funds set aside to cover your portion in case you have a claim.
- True or false: Home insurance offers coverage for floods. A standard homeowners policy covers water damage that originates inside your home but you need a separate policy for flood — to cover damage from waters rising outside of your home. Farmers flood insurance may be available for both residential and non-residential buildings.
- True or false: My landlord’s insurance will cover my belongings. It’s your stuff — typically your landlord’s insurance isn’t designed to cover it. But renters insurance is — providing coverage for your household contents and personal belongings.1