Month: September 2017

Common insurance myths — busted!

We get it—sometimes it’s hard to separate insurance fact from insurance fiction. For example, did you grow up thinking that car insurance costs more if you drive a red car? What about if you live in an apartment—does your landlord’s insurance policy cover your stuff?

Let’s bust these common insurance myths and uncover the truth!

Myth 1: If you buy a red car, you’ll pay more for car insurance.
Busted! The color of your vehicle has absolutely no bearing on your car insurance premium. Rather, make, model and safety features are part of what determines what you’ll pay. Other factors—including credit history, zip code and discounts—are also taken into consideration. So, go ahead, buy the red car!

Myth 2: If your car is damaged in an accident, insurance will always cover a rental car.
Busted! Rental reimbursement coverage does not automatically apply after an accident. As an optional coverage, it must be purchased separately. A common misconception is that auto insurance automatically covers the cost of a replacement rental car. In reality, you need to select this coverage and apply it to your auto policy.

Myth 3: If your car is totaled in an accident, you’re off the hook for car payments.
Busted! Cars’ values depreciate quickly and your car can sometimes be worth less than what you owe on it. Fortunately, there’s a nifty coverage type called loan/lease gap coverage that will pay off the balance of your car loan in the event your vehicle is totaled and you owe more than what it’s worth.

Myth 4: Your landlord’s insurance policy covers your stuff.
Busted! While the building owner’s insurance policy should cover the structure, typically, you’ll need renter’s insurance to cover your personal belongings. For example, if there is a fire, your landlord’s insurance would help cover structural damage and your renter’s policy would help you replace personal belongings that are lost or damaged.

Myth 5: Homeowner’s insurance only needs to cover the market value of your home.
Busted! The cost to totally rebuild your home is usually much more than its market value. You’ll need to consider today’s construction and labor costs when thinking about homeowner’s insurance.

Myth 6: If your old stuff is destroyed, you get brand new stuff.
Busted! There is a difference between Actual Cash Value and Replacement Cost Value when it comes to replacing contents during a claim. If your 10-year-old television is destroyed in a storm, for example, you will need to have Replacement Cost coverage to be able to cover the cost of buying a new one. Otherwise, Actual Cash Value will cover what the television was worth, used, on the day it was destroyed.

Myth 7: You will always be paid the stated value for your “scheduled” items.
Busted! If you have a high value personal property item (say jewelry) and “schedule” it with a stated value of $10k and it’s lost or stolen, you may only be covered for the current Replacement Cost Value up to the stated value. Think of the stated value as the limit instead of a guaranteed dollar figure.

Myth 8: Your own car insurance covers you the entire time you’re driving for a ridesharing service.
Busted! There’s a period when your personal car insurance checks out before the rideshare company’s insurance checks in. Let’s say you’re cruising around, not doing much when you decide now is a good time to make a few extra bucks, so you turn on your ridesharing app. From the time you turn it on and are waiting for a ride request until the time you receive the request and are on your way to pick up a passenger, you may be underinsured. Different ridesharing companies have different coverages during this period, so a specific rideshare gap endorsement could help you out.

This post is for information purposes only. For specific coverage details, always refer to your policy. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies.

5 life insurance tips for new parents

Congratulations on the new addition to your family! Parenting is a crazy, amazing experience. As a new parent, your life will never be the same — and neither will your insurance needs.

You’ll want to protect your little bundle of joy forever. Therefore, life insurance is so important for parents. It provides a financial safety net in case you’re no longer there to provide for your child. And even if you already have a life insurance policy, your needs change greatly once kids are in the picture.

Here are some things to consider and tips for purchasing life insurance as a new parent.

  1. Consider permanent and term life insurance… and know the difference.

There are two main categories of life insurance: permanent and term. Permanent life insurance offers lifelong coverage, while term life insurance provides coverage over a set period of time. For parents, it may be wise to purchase a permanent policy and then add term insurance during your kids’ dependent years. This allows you to have a strong coverage foundation, plus some extra protection to ensure that your children will have what they need.

  1. Think about education expenses.

It may seem too soon to be thinking about education expenses for a child who can’t even walk yet, but it’s important to consider these costs when determining your life insurance policy. We all want our kids to have the best opportunities possible. Factoring education expenses into your life insurance can help ensure that they will have the same opportunities even if you aren’t around.

  1. Stay-at-home parents need life insurance, too.

Stay-at-home parents may not earn an income outside of the home, but consider what it would cost to replace everything that they do. The loss of a stay-at-home parent may mean that the surviving parent will now need to cover childcare and other expenses, which can rival the cost of college tuition.1 Purchasing life insurance for a stay-at-home parent can help cover these costs and relieve some of the financial burden on the surviving parent.

  1. Don’t designate your minor child as your beneficiary.

Yes, you’re buying the policy so your kids have financial protection, but it can be a big mistake to designate a minor as your beneficiary. A better option would be to set up a trust or designate an adult, like your spouse or a close relative, to oversee the distribution of money to the minor.

State regulations may limit if or how much a minor child can receive in life insurance proceeds, so they may have to wait to receive the life insurance benefits until the court appoints a guardian to administer the funds. This can take quite some time and typically requires multiple court dates.

  1. Speak with us!

The Wright Insurance Company help you find the best life insurance coverage, for the right price. Brandon can provide quotes from multiple carriers, discover discounts and work with you to determine your exact life insurance needs.