October, 2015 | Boizelle Insurance Partnership

6 Scary Insurance Misconceptions

There are lots of spooky things about Halloween. Just a few include ghosts, goblins and the unfathomable: running out of Halloween candy.

Not many people add insurance to this list, despite the fact that a coverage gap could leave you and your family in serious financial trouble.

Read on to learn about six of the scariest insurance misconceptions and how you can protect yourself.

Six Scary Insurance Misconceptions

  1. Your home insurance policy automatically includes flood and earthquake insurance.

Insurance companies can’t cover floods and earthquakes at reasonable rates since they tend to be so devastating. Fortunately, there are options for both risks. Earthquake coverage is typically offered as an endorsement while the federal government offers flood coverage through the National Flood Insurance Program (NFIP). It’s definitely worth considering since people who live outside of high-risk flood areas file more than 20 percent of NFIP claims. What’s more, just one inch of water can cause major damage to your home.

  1. Your homeowners and personal auto policies will cover you if you use them to operate a small side business.

Your homeowners and personal auto policies may not adequately cover your business activities. If you operate a home-based business or another small business, explain your situation to your insurance agent. He or she can advise you about any additional coverage you may need.

  1. Your homeowners policy will automatically replace your lost or damaged items in today’s dollars.

There is a big difference between actual cash value (ACV) and replacement cost. ACV reimburses you based on how much an item is worth after factoring in depreciation. Guaranteed replacement cost is much better: with it, your policy pays the cost of rebuilding or repairing your home or replacing your possessions without a deduction for depreciation.

  1. Only millionaires need a personal catastrophe liability (PCL) policy.

Anyone can be involved in a serious accident. Most of the time, incidents are caused by simple negligence like forgetting to lock the fence surrounding your pool before a child finds his way to it.

Accidents of this nature have the potential to cause financial catastrophe to people of any financial means. Without proper coverage, you could also lack the resources to compensate someone for their injury and hardship.

  1. I’m not responsible if my friend wrecks my car.

If your car is involved in an accident, it’s your responsibility since you granted permission for someone to use your car. So your insurance will cover the damage, and the accident will go on your insurance record. This could result in a higher premium. The lesson? Limit how much you loan your car—and only choose trustworthy drivers.

  1. You only need life insurance if you have kids.

Parents—both those who are employed and stay-at-home—aren’t the only ones with a need for life insurance.

Does anyone else (like a parent) depend on your income? Then life insurance is probably a good option for you. Do you own a home with someone else? If so, could the surviving partner carry the full load of the mortgage? Or maybe you simply want to leave money to your favorite charity or relative. It’s also wise for business partners to take out life insurance on each other so they could afford to purchase a deceased partner’s outstanding shares.

There’s no need to fear a potential coverage gap. Simply give Boizelle Insurance Partnership a call. We can tell you about affordable options that give you the protection you need. Don’t worry–we won’t try to sell you ghost insurance (a real insurance coverage).

By: Amanda Prischak, Erie Insurance

Read more

Whose Insurance Pays When Your Friend Crashes Your Car?

Auto insurance typically follows the car rather than the driver. This means that your insurance will likely pay if your friend crashes your car.

There are two exceptions. The first is when the damage and/or injuries exceed the available limits on your policy. In this instance, it’s possible that your friend’s insurance would kick in to cover the outstanding balance.

Another exception can occur when someone drives your car without your permission. “This can get confusing,” says Dave Freeman, Vice President, Personal Lines Underwriting at Erie Insurance. “For example, imagine a college roommate grabs the keys and borrows another roommate’s car. Some courts say permission was implied; others say express permission was necessary. It really varies by jurisdiction.”

Will the Accident Go on My Record or His?

When you let someone else drive your car, you are taking responsibility for their behavior. So the accident becomes part of your insurance history.

It’s also possible that your rate may go up. Your insurer bases the rate on your likelihood of filing a claim; when you loan your car to someone who may not be as careful or have as much experience driving as you, your rate needs to reflect that.

If you’re with ERIE, you can help avoid a rate increase with the ERIE Rate Lock® feature.* (Not available in New York or North Carolina. Limited to three years in Virginia.) Even if you have a claim, your rate won’t change unless you add or remove a vehicle from your policy; add or remove a driver from your policy; or change your primary residence. Boizelle Insurance Partnership can tell you more about ERIE Rate Lock®.

The accident may also show up on your friend’s driving record. This is especially likely if a police report gets filed after your friend crashes your car.

The Lesson

Freeman advises drivers to be selective when loaning their cars. He also says it’s important to let your insurance agent know if someone else regularly drives your car. “If someone is a regular operator of your vehicle, you should add him or her as a driver on the policy,” says Freeman. “If you intentionally fail to disclose the person as a driver, the claim could potentially be denied if that person has an accident.” (The only exception is a spouse who lives in the same household— he or she is automatically a “named insured” on the policy.)

To learn more about auto insurance and ERIE Rate Lock®, contact Boizelle Insurance Partnership at (301) 948-2010.

*ERIE Rate Lock® does not guarantee continued insurance coverage. Insured must meet applicable underwriting guidelines. Premium may change if you change policy coverages, deductibles or pay plan. Patent Pending.

By: Amanda Prischak, Erie Insurance

Read more