Insurance Myths, Debunked

By Elisabeth Axiak

The whole goal of Halwell U is to make insurance both less mysterious and more fun for people. If you hold an insurance policy, but don’t know the lingo, the ins and outs, or the details of anything insurance-related, this is for you.
Since the world of insurance has been (up until this point, hopefully) quite mysterious, it’s home for a lot of myths. If you own a red car, is your insurance automatically higher? Does ‘no-fault’ insurance mean you and your insurance company don’t spend a dime? Today, these questions and more will be answered once and for all.

1. Don’t buy a red car, because they automatically have higher insurance premiums.
This isn’t true. There are so many factors that make up the formula for calculating your insurance premium: make, model, age, how much it’s being driven on a daily basis, where you live, etc. All of these things can affect your rates.

This means that a young man who has a red car, but lives downtown and is able to walk to work could have a lower premium than a middle-aged woman with a blue car, who commutes from the suburbs into work every day.

2. When filing a claim, I should overstate the damage to my house or car, since insurance companies will give me less than I ask for.
False. Our claims adjusters want to make sure that you get what you deserve – and they have a detailed process to do this. And, did you know that inflating your insurance claim is actually a crime?

3. “No Fault Insurance” means it’s not my fault.
This is not true either. “No Fault Insurance” simply means that if your car is damaged or you are injured in a car accident, you deal with your own insurance company, no matter who is at fault.

If you are not at fault in a car accident, your insurance company will pay for your damages, and your premium will not increase (unless your insurance company has filed a rule about that with FSCO – but we can safely say that at Halwell, we do not). If you are at fault, you will pay your deductible and your rates might increase.

4. If my friend drives my car and gets into an accident, it’s on them, not me.
The accident actually follows both the vehicle and the driver – and both the owner of the car and the driver could be charged for an at-fault accident.

As well, when it comes to making a claim, your insurance (as the owner of the car) will be used to cover the claim. So be careful who you lend your car to!

5. My home insurance policy only covers my house.
This is another myth, but one we are happy to bust! A typical home insurance policy covers not only your house, but its contents and any detached structures on your property as well. If you want to know what your insurance policy specifically covers, read your wordings or speak with your broker.

6. I’m going to buy an older home so that I can get cheaper insurance.
This is another popular insurance myth. Buying an older home might actually lead to higher insurance premiums since there’s a higher chance something might go wrong, and it might cost more to fix it.

Check out our infographic below about all our insurance myths:

Infographic about insurance myths, debunking insurance misconceptions. Halwell U by Halwell Mutual.


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