Top Misconceptions about Insurance

1. It's better for my child to have his or her own car insurance. A common misconception is that purchasing auto insurance for your child on his or her own policy is the best option. Will it save premium? Will it protect me against a lawsuit? By separating your child's auto policy, you may actually be increasing your premium since the policy may no longer qualify for multi-car, multi-product and other discounts. In addition, the premium would be based on your child's credit insurance score. What if you do decide to purchase a separate policy for your child with low limits of liability? If your child is a resident of your household or a student away from home temporarily, you may still be held liable for his or her actions. The other problem arises should you or your spouse decide to drive your child's vehicle. Insurance follows the vehicle and you would have the reduced limits of coverage. The majority of the time, it is our recommendation to insure your children on your auto policy with the same limits of liability. There are circumstances when this may not be practical but we would discuss on an individual basis and offer all of the options to you.
2. My recreation vehicles and stored autos are covered under my home and umbrella policy. Homeowner's and umbrella policies have limitations and exclusions which would apply to liability and physical damage coverages. Snowmobiles, recreational vehicles, campers, boats, mopeds, motorcycles, scooters, motor homes and even children's toy recreational vehicles are items which need to be addressed when reviewing your insurance. Stored autos are never covered on a homeowner's policy.
3. My business whether full or part time is automatically covered on my home and auto policies. A homeowner's policy has limitations for business personal property. It may cover only $2500 on premises and $250 off premises. For instance, a person who sells Mary Kay products may have thousands of dollars of product at their home or a photographer may have thousands of dollars in camera equipment off premises shooting pictures at a wedding. In addition, there are exclusions for business liability on the home policy. If a customer slips and falls on your driveway and they were coming to buy product at your home or they were injured by a product you sold them, there is likely no coverage on the home policy.
   
   In addition, if you use a detached structure, such as a shed, for business use in any way, you do not have coverage for the shed. (new paragraph) Auto insurance has limitations and exclusions for business use too. If you are a pizza delivery driver or carry people for a fee such as day care, the company must be aware of these exposures so that proper coverage will apply. (new paragraph) It is our recommendation to discuss all business ventures with our commercial department.
4. I have full glass, rental reimbursement and towing automatically on my auto policy. Full glass, rental reimbursement and towing are not automatically included on all policies. Rental reimbursement gives a per day dollar amount if you need to rent a car while your vehicle is in the repair shop due to a covered loss. A common amount is $30 per day up to a maximum of $900. Towing would pay up to a certain dollar amount per occurrence. We represent and recommend AAA Road Service for all of our customers. Call us any time to discuss your options or update your coverages.
5. I have coverage out of the country. Renting a car in Italy; getting sick on a cruise off the shores of Mexico; losing your luggage in Iceland; renting a moped or jet ski in Australia. These are all exposures which should be discussed with your agent before you leave! Travel policies can be purchased to cover you for certain exposures.
6. My auto insurance covers me automatically when I rent an auto, motor home, moving van or trailer. If you rent a car, you may need to purchase both liability and the collision damage waiver. The collision damage waiver provides coverage on the vehicle if it is damaged. If you have an auto policy that covers liability only, there would be no coverage if you damaged the rental vehicle. If you rent a car out of the country, you may not have world wide coverage. Read the rental contract carefully. There may be limitations on where you drive (country unpaved roads may be excluded), if you drive while impaired, if the driver is under age 25, if you allow someone else to drive the rental vehicle. In addition, your policy may not pay for loss of use if the vehicle is out of service for a number of days. Be sure to note all damage to the rental vehicle before you sign the rental car contract. We have had incidents where the rental company attempted to have our clients pay for damage that was already there when they rented the vehicle. In addition, auto insurance may not cover you if you rent a motor home, moving van or trailer or camper.
7. Declining market values on homes should decrease the amount of coverage on my home. Homeowner's policies commonly cover the cost to replace the home at today's cost. Building costs have not declined. It is important to call us if you have made improvements to your home or built another structure. It is important to review your coverage with us if you have any questions.
8. The limits I have chosen on my policies do not need to be changed or updated. Insurance laws and coverage change frequently. For instance, in November 2009 Wisconsin insurance State statutes changed significantly. Medical costs continue to rise. If your liability limits are not sufficient to cover a loss, you may be responsible to pay the difference out of your assets. We have heard numerous examples of people paying for years out of pocket for not having enough coverage. We offer umbrella policies that provide coverage over your primary policies from $1,000,000 to $10,000,000. It is important to review your policies on a regular basis.
9. Appraisals on scheduled items do not need to be re-appraised. Personal property such as jewelry, fine art, furs, collectibles, antiques, guns, etc., are items that may need to be added to your homeowner's policy. There are limitations for theft of certain personal property. Jewelry typically has a theft limitation of $2500. There may also be no coverage if a diamond is lost out of the setting. Unless specifically endorsed to your policy, fine art and collectibles have limited coverage. If there is a loss, the value of these items needs to be documented. Items may need to be re-appraised since the price of gold, silver and precious stones may fluctuate. Fine art, guns or your collection may appreciate in value over time.
10. If I loan my car to my neighbor, their insurance will provide coverage for every injury or damage. Wrong. When you loan your car, you loan your insurance. If they damage the vehicle and/or injure someone, your insurance would pay the claim and could result in higher premiums.