The “most misunderstood industry”, that’s what two Wharton professors, Howard C. Kunreuther and Mark V. Pauly called the insurance industry in their book written in 2013.
These two revered decision scientists and economists are spot on in their conclusion. Insurance is not just misunderstood but a bit complicated.
As insurance advisors, we have our hands full with several misunderstood facts about insurance regularly. That’s we will like to put this confusion to rest through this piece.
Many think that their insurance policies is not a good deal, forgetting that the highest ROI on insurance is no return at all.
Let’s put this straight, insurance is never an investment but a protective activity. It’s putting in place a form of security for you, your loved ones, and their future.
The feeling of investment is why numerous policyholders cancel their policies.
Low probability events in the United States includes earthquakes, flooding, and other natural disasters. While they are low probability events, they often have high impact consequences.
But can you imagine that despite California being prone to earthquakes, only 10% of Californians subscribed to earthquake insurance. The belief is that this won’t happen to them forgetting that this is where insurance could have been more valuable.
You may not have realized, but there’s a limit your home or auto insurance has over some claims. Umbrella insurance isn’t about how rich you are; in as much you have a home and savings, you can be sued for all you are worth.
You need to overlook the cost and think of it as another layer of protection for liabilities. What you think of as a simple event can turn into a legal battle if you or your business is sued. Y
In the minds of many, long-term care insurance is intended for only adults. This is far from the truth. While long-term insurance pays for nursing home expenses for the elderly, there’s a lot the younger generation can also benefit from.
As a young person, long-term insurance can be of immense benefit to you. You’ll be able to pay for long-term rehabilitation. It can also help sort out medical bills that put you out of work for a long time.
This is not to break your heart but your homeowner’s insurance policy does not cover everything in your home. There’s a process you’ll have to go through to create a cover, and it’s called scheduling.
Scheduling takes an inventory and description of all you own—this ranges from furniture, electricals, and electronics with their serial number. In summary, if you are to be reimbursed for your losses, you have to keep an ongoing inventory of your properties.
There’s nowhere where the colour of a car is considered when calculating auto insurance premium. This is another misunderstood fact about insurance that has to be corrected.
Truly, the red color is always evident from anywhere, but it’s never considered when valuing your premium. A red car will not cost you more to insure than a Black or Green car. Your insurer only considers the age and value of the vehicle, your driving history, and the brand of your car in valuing your premium.
An insurance policy is just like every other agreement. As a policyholder, you should make it a habit to renew your policy early enough. However, if this is not possible, you are still eligible to a 30 days grace period.
Nonetheless, even though you are not eligible to claims during the grace period, you are still entitled to other crucial aspects during the waiting period.
There are still dozens of misunderstood facts about insurance out there. Reach out to us at Asesores de seguros de Tillman; our expert advisors are ready to provide the correct answers to your questions.