Common insurance myths debunked — what you should really know

Insurance runs on a handful of widely shared beliefs, most of which were true somewhere at some point and are not true of the policy in front of you.

“Red cars cost more to insure”

Color is not a rating factor. The model, the engine, the repair cost and the theft record are. A red hatchback and a gray one of the same specification price identically.

“My landlord’s insurance covers my belongings”

It covers the building and the landlord’s liability. Your furniture, electronics and clothing are not on that policy and never were. A renters policy is usually the cheapest cover anybody buys.

“Comprehensive means everything is covered”

Comprehensive is the name of a section, not a promise. It covers theft, fire, weather, vandalism and animal collisions. It does not cover crashing.

“Making a claim always raises the premium”

Some claims are rated, some are not, and no-fault claims are often treated differently from at-fault ones. The way to find out is to ask before you claim — an insurer will usually tell you how a given claim would be treated.

“The cheapest quote is the same cover for less”

Sometimes. More often it carries lower limits, higher deductibles, or an exclusion the other quote does not have. Comparing quotes means comparing the schedules, not the totals.

Every one of these myths costs money in the same way: it stops somebody reading their own schedule. The schedule is two pages and it is specific to you.

“I am covered for business use because I told the insurer I commute”

Commuting and business use are different classifications, and delivery or client visits usually fall into the second. Undeclared use is one of the more common reasons an otherwise clear claim is refused.