Top 6 Insurance Myths Debunked
May 17, 2022
Over the years there are many myths that have developed about insurance. Do you need Worker’s Comp for your sole proprietorship? Is flood damage covered under your homeowners’ insurance policy? And of course, is a red car more expensive to insure? Here is the truth behind some of the top business and personal insurance myths we hear.
Myth: Business Insurance is very expensive
Truth: Business insurance can be very affordable to protect your company. It’s often a small price to pay to give your peace of mind that your livelihood will be protected if something unexpected happens. However, it’s important to meet with an independent insurance agent to discuss your needs so you’re not paying more than you need to.
Myth: Sole proprietors don’t need worker’s compensation insurance
Truth: While it’s true that in many states sole proprietors have the option to file an exemption to eliminate the requirement, this is not always the best thing to do. For example, in certain situations, if you or an independent contractor were to get injured on a job, your client would be on the hook. That’s why many companies will require worker’s compensation before working with them.
Myth: You only need business insurance if you have employees
Truth: Whether you’re managing a company of 100 employees or you’re a one person show, it’s important to have business insurance. Not having employees may eliminate some insurance policy needs, but policies such as general liability insurance, commercial property insurance, and commercial auto insurance must be considered.
Myth: Your landlord’s insurance policy covers all your things
Truth: If you want your personal belongings to be covered, you’ll need renter’s insurance. A building owner’s insurance policy will only cover the structure and their assets, not yours. Your renter’s insurance policy is what helps replace your personal belongings in case of loss or damage.
Myth: Flood damage is covered under your homeowner’s policy
Truth: This myth is busted! If you need to cover your home from flood damage, you’ll need to get a separate flood insurance policy. And if you live in a flood zone and have a mortgage, you’re required to have it. Even if you’re not in a FEMA designated flood zone, it’s something to consider if the surrounding area is prone to flooding. Flood insurance does not cover other water damage like a sump pump failure, so it’s best to talk with an independent insurance agent about homeowners’ insurance endorsements like a water backup endorsement.
Myth: A red car is more expensive to insure
Truth: Did you know that a recent study done by InsuranceQuotes.com found that 44 percent of Americans think owning a red car increases their insurance premiums? It’s time to bust this famous myth once and for all! Color has no bearing on the cost of your car insurance premium. Car insurance companies look at the make, model, year, and safety features your car has to determine the premium you’ll pay. Other factors such as credit history, zip code, and vehicle purpose are also considered. So don’t worry about buying that red car!
While we only covered a few myths in this article, there are many others out there you should be aware of. That’s why it’s important to consult with an insurance expert, like Lewis Mohr Insurance Agency, to evaluate your unique needs for both business and personal insurance. If you have questions about your current insurance policy or are looking for a new policy, please give us a call or send us a message!