Insurance is, without a doubt, an important component of financial planning. Unfortunately, many Albertans in cities like Calgary and Edmonton put themselves and their assets at risk due to tightly held misconceptions and hearsay often found on the internet, which can lead to misinformed decisions.
For instance, a recent survey discovered that a large majority of Canadians believe red cars cost more to insure. This is a myth that has no basis in reality.
While doing your own research online and asking friends for advice on the best insurance company is a great starting point, relying solely on these sources is not sustainable.
In this blog, we will address seven common insurance myths, thus providing information to ensure you choose the right coverage for your needs.
Myth 1: Insurance is too expensive.
If you live in Alberta, you must have heard stories about how insurance is an unaffordable luxury that can strain financial budgets and provide little returns.
However, this is not true. Finding the best insurance company in Alberta can be quite affordable when approached strategically, as they offer various coverage packages that fit your financial budget.
To have the best experience, compare coverage quotes from different insurance providers. Top insurance companies in Alberta offer competitive rates and discounts that spread across homes, farms, commercial properties, churches, and automobiles.
Understanding these options and their benefits can make your insurance experience less pricey and more effective, thus ensuring maximum coverage without breaking the bank.
Myth 2: Home insurance covers all natural disasters.
Many homeowners in Alberta believe that their home insurance company covers all types of natural disasters. However, this is false. Standard home insurance policies exclude coverage for specific natural disasters such as floods, landslides, and earthquakes.
According to data from Enfield Council, Edmonton is one of the highest flood-risk area in the borough, with over 70,000 properties at risk. Residents in these or other areas tjat are prone to water losses will need to consider water losses and if a company will insure them in the event of a loss.
Similarly, earthquakes and other natural disasters require additional coverage. Considering these packages as protective measures against these negative events will save you in the event of a loss.
Myth 3: Red cars cost more to insure.
It won’t be surprising to know that you, your family, friends, or someone you know believes that red cars are more expensive to insure due to their flashy colour and myths about them being prone to accidents.
Similar to other misconceptions, this is not true. Top insurance companies in Alberta do not consider the colour of your car when determining insurance premiums. Rates are based on many factors including vehicle models, engine size, year, and a driver’s history, which include driving records and claims history.
Data and insights from experts suggest that car colours have no impact on insurance costs. Therefore, you can pick your preferred red car without worrying about higher rates.
Myth 4: Homeowner insurance covers insect infestation.
As a homeowner in Alberta, dealing with insects such as ants and termites are common, but infestations can be particularly worrisome. Even if you have an active home insurance policy from the best insurance company in Alberta, it will not cover damages from these pests, as it is considered preventable through regular maintenance and inspection.
Termite, ant, or bug infestations are classified as home maintenance issues rather than unexpected events, thus the need to invest in regular inspections and preventive treatment is required.
Understanding these exclusions can help you become more proactive in home cleaning and prevent costly repairs.
Myth 5: Auto insurance covers events of damage, vandalization, or theft.
As a car owner, you must have heard speculations that standard auto insurance covers the event of theft, vandalization, or damage caused by tree limbs, flood, or fire. This is not always true.
These types of events are covered by comprehensive packages, which is an optional coverage separate from basic liability and collision insurance. If you have a knack for road trips, it is important to contact your insurance company and understand your insurance package that covers these potential damages.
Without this additional coverage, you may find yourself responsible for the repair or replacement costs.
Myth 6: My credit score does not affect my insurance rate.
You may be misinformed if you believe your credit score has no bearing on insurance premiums. It is important to note that types of automobiles and driving history are not the only considerations related to auto insurance
A number of Insurance companies use credit-based insurance scores as part of their risk management when determining premiums for auto and home insurance packages.
Studies by the Federal Trade Commission (FTC) and the Insurance Information Institute (III) have shown a strong correlation between credit history and likelihood of filing claims. Insurance providers argue that individuals with lower credit scores tend to file more claims and incur more cost coverage for the firm.
As a result, people with higher credit scores may receive additional discounts compared to people with lower credit scores. Regularly improving your credit score can lead to more favourable insurance premiums.
Make Informed Decisions on Your Insurance Today
Understanding these myths and the facts behind them is important for making informed decisions about your insurance needs.
We encourage you to review your insurance policies thoroughly and consult a financial advisor to ensure you have the appropriate coverage. By doing so, you can gain peace of mind, knowing that you are well-protected against potential risks and have a solid financial safety net in place.
If you’re not sure of the right package for your home, farm, commercial, church, or vehicle, don’t hesitate to seek help from MMI Insurance.
You can call us at 1‑866‑222‑6996 or contact us online for expert assistance. Our experienced advisors are ready to go the extra mile to find the best insurance policies for your needs.
