Test Your Insurance Knowledge! Frequent Insurance Myths Quiz
January 4th is National Trivia Day! We thought it would be a good time to test your insurance knowledge and debunk some frequent insurance myths. Take the quiz below to see how well you know insurance!
Which of the following factors does not impact your personal auto insurance rates?
Your driving record
The color of your car
Your credit score
Your claims history
Answer: B. The Color of your car
The color of your car does not impact your insurance premium. Growing up, I remember hearing that red cars are more expensive to insure cars of other color s because people who purchase red cars tend to take more risks. Actually, the color of your car has no impact on your auto rate. Insurance companies use driving records, credit score, and claims history among several other factors including garaging location, replacement cost of the vehicle, the radius of travel, safety features, and usage to determine your auto insurance rates.
My building limit on a commercial property policy and my dwelling limit on a personal homeowners or dwelling fire policy needs to equal the market value of the property.
True
False
Answer: B. False
The building limit on a commercial policy and the dwelling limit on a personal homeowners or dwelling fire policy should be determined by the cost of labor and materials to rebuild in like kind and quality today. Land value and depreciation should not be factored into the insurable limit.
Which of the following coverages is not commonly excluded from an unendorsed package, homeowners, and dwelling fire policy?
Flood
Water Back-up
Earthquake
Sinkhole Collapse
Answer D: Sinkhole collapse
Flood, earthquake and water back-up are not covered under a basic, broad, or special form property policy. These coverages can often be endorsed onto a policy or written under a separate policy.
My umbrella policy covers all claims that are not covered by my homeowners, auto and other policies.
True
False
Answer: False
A lot of people believe that an umbrella is a “catch-all” policy. While an umbrella policy may be broader in some instances than your other policies, it is not always, and it does not cover any and every claim scenario. An umbrella policy is a liability policy and does not provide any property coverage for property that you own. An umbrella policy is a cost affordable option to increase your limits and minimize uninsured losses.
If any of these questions took you off guard, it is a good idea to check with your current agent to schedule a comprehensive review of your insurance coverages. We are more than happy to help you with a complimentary review of your insurance coverages to assess your current program and educate you!
Be sure to give me a shoutout on Jeopardy if you make it and any insurance questions come up!