Page 7 - Explore Your AAA – AAA Southern Pennsylvania – January/February 2020

Insurance
Does driving a red car raise your insurance rates? Does your landlord’s insurance cover your belongings? AAA is taking on these and other common misconceptions that may lead to risky decisions when it comes to preparing for the worst.
Insurance can seem complex and intimidating, but your insurance company
is there to answer your questions. Spending a little time now learning about what’s covered and what’s not can help you
avoid costly and emotionally draining consequences later.
For a variety of reasons, many consumers don’t have adequate insurance coverage to deal with potential losses. That’s why it’s
so important to separate fact from fiction. As part of its continuing effort to keep consumers educated about insurance,
AAA wants to make sure people get the accurate information about these myths so they can make informed decisions when selecting different types of coverage.
Here are some common insurance myths and the facts from AAA insurance experts:
I have a home insurance policy, so I have all the coverage I need.
– FALSE
Many policies don’t have a high enough limit to rebuild the home in case of complete destruction. Some homeowners will find themselves short tens or hundreds of thousands of dollars if their home is destroyed by fire or other disaster.
My home insurance covers all disasters likely to happen in my area.
– FALSE
Standard home insurance covers disasters such as fire, lightning, theft, vandalism and
damage from smoke, water or wind. It does NOT cover damage caused by a flood or earthquake. Flood and earthquake coverage can be purchased in separate policies.
All of my valuables will be covered in the event of a burglary.
– FALSE
There are limits on the
amount of coverage you
can receive for valuables
such as jewelry, antiques,
business property and art,
but you can purchase endorsements that will add extra protection.
The color of my car affects my auto insurance rate.
– FALSE
Many factors including a vehicle’s model, make, year, and the driver’s experience and age may impact your auto insurance rate, but the color of a vehicle is not one of them.
A stay-at-home spouse does not need life insurance.
– FALSE
A spouse who stays at home may take care of children, chores, and transportation.
In the unfortunate event of their death, these would become expenses that could be offset by the proceeds from a life insurance policy.
I don’t need renters insurance because my landlord is covered.
– FALSE
Your landlord’s insurance typically covers the building; it does not cover your personal property. You may also be liable for any structural and/or water damage that you cause. Renters insurance also covers your liability in case a guest in your home or apartment is injured.
It is possible to have too high a limit for homeowners insurance coverage. – TRUE
This is rare and prohibited by law, but some mortgage companies try to require new homeowners to purchase insurance for the entire loan amount, which can be more than the replacement cost of your home. It is only necessary to cover the replacement cost of the home; land does not need to be insured.
To learn more about homeowners or renters insurance, contact your AAA Insurance Agent at 1-800-222-1469, visit AAA.com/Insurance, or stop by your local AAA office.
JANUARY/FEBRUARY 2020
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