Salmon Agency - Oviedo Insurance - Florida Auto, Home, Life

Salmon Insurance | Learning Center Insurance Myths


There are a variety of myths and misinterpretations about insurance. To help you separate fact from fiction, our Oviedo Insurance Office compiled a list of insurance myths that we've heard frequently and provided brief explanations to help set the record straight. Call a trusted associate today if you have any concerns regarding these myths.

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Myth #1: Flood insurance is only important if you live in a high-risk area

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Not true. 20 to 25% of flood claims come from outside high-risk areas. Homeowners are four times more likely to sustain a loss from a flood than a fire. Remember, homeowner's policies don't cover flood situations, separate flood insurance is necessary.

Myth #2: Umbrella Insurance isn't important for everyone

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You don't have to be wealthy to be sued. Lawsuits are common, making umbrella insurance even more important. It gives you added liability protection above and beyond the limits on personal home, auto, and watercraft insurance policies. For a relatively minimal rate, you can add an additional $1 to $5 million in protection.

Myth #3: Renter Insurance isn't necessary if your stuff isn't worth a lot

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Renter insurance does more than protect personal property. It covers personal liability if someone gets hurt at your home. Lawsuits are common, so make sure you are protected. Remember, the replacement value of personal property can add up quickly, especially if you lose everything in a disaster.

Myth #4: My car is old, so I don't need to have high insurance limits

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The age of a car has no impact on your potential liability if you're in an accident, so you need to have good liability limits. While it might seem to make sense to remove "comprehensive" and "collision" coverage, you should only do this if you can afford the risk and cost of having to replace the vehicle on your own.

Myth #5: If someone driving my car causes an accident, I won't be held responsible

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While the "points" for being at fault in an accident affect the driver's rating, the insurance policy covering a vehicle is considered primary. If someone else is driving your car, your insurance company would have to pay damages in an accident.

Myth #6: Only the "Breadwinner" in the home needs Life Insurance

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Think about the value contributed by a "non-working" spouse: childcare, housekeeping, food preparation, home accountant, school transportation and more, can quickly add up. Consider purchasing life insurance to cover the financial hardship suffered by the absence of a person's income or contribution.

Myth #7: If I become disabled Social Security will take care of me

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Don't count on Social Security to take care of all your needs if you should become disabled. You also need other plans to reduce impacts to your lifestyle. We insure our cars, homes, etc., but often don't think about disability insurance as protection if we are unable to work and earn an income.

Myth #8: I drive a company car, so I don't need my own Auto Insurance

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The car may be covered, but your liability probably isn't. Even if your employer has coverage that provides some liability protection, it may not be enough, or you could be sued personally in a bad accident. Also if you borrow or rent a car, you should have your own protection. Being listed on another auto policy isn't enough to protect you because business use is different. You may need to purchase special protection.

Myth #9: All Car Insurance Is the Same

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When comparing policies, it's easy to look at price and not consider the level of protection. Any provider can reduce your coverage limits to reduce your premium, but you can end up at greater risk. Smart ways to save are:

  • Increasing your deductible.
  • Ask for all possible discounts you qualify for.
  • Talk to your agent periodically - changes in life can change your needs.

Myth #10: I have Health Insurance, so I don't need medical coverage on my Car Insurance

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Some health insurance plans limit coverage or have high deductibles, so having medical coverage gives you added protection. It will also cover passengers in your car, regardless of who causes an accident.

Myth #11: My Health Insurance will pay for my long-term care needs

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Health insurance doesn't cover custodial care. Your options are:

  • Use personal savings
  • Rely on family to help
  • Get Long-Term Care Insurance

In FL, Medicaid provides assistance to approximately 70% of all nursing home residents, but it requires using most of your savings first.

Myth #12: I only drive my car occasionally, so I don't need higher limits

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The possibility of an accident is the same whether you drive a car every day or once a year. Your liability for injury you cause or property you damage isn't diminished because you don't drive often. Make sure you always have good protection limits! If you're looking to reduce expenses, consider increasing your deductible.

Myth #13: I'm self-employed and don't have employees. Workers' Comp Coverage isn't available

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Workers' Compensation insurance laws have changed. In the past, you couldn't obtain coverage if you didn't have employees, but that's no longer the case. You can protect yourself from on-the-job injuries with Workers' Comp.

Myth #14: I'm self-employed and don't have employees. I don't need Workers' Comp Coverage

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You're your own "employee", and you can get hurt, too. How will you support yourself if you get hurt on the job and can't work? Workers' Compensation coverage is important even if you're a one-person operation. Make sure you take care of yourself and those who depend on you.

Myth #15: Commercial Auto Policies cover equipment and tools left in a vehicle

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Only equipment permanently attached to the vehicle is covered in a commercial auto policy. Loose tools and equipment are not covered because they aren't permanently attached. To protect tools, supplies and equipment while in transit, you will need to add specific coverage.

Myth #16: If I'm not at fault in an accident, the other person will pay

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This assumes that the person at fault has insurance coverage. However, some people have no insurance or only minimal insurance that won't cover damage they cause to others. Even if you sue them, you may not be able to recover damages. The best way to protect yourself is having good limits on your own policy for the specific parts that cover being hit by an "uninsured" or "underinsured" driver.

Myth #17: I use my car for my delivery job. I'm not self-employed, so I'm still covered

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If your vehicle is used for anything but personal use, then you probably need to extend your personal auto policy to cover business use of your vehicle. Be sure you understand what is and what isn't covered by your policy. The best way to find out is to review your policy and call us with questions.

Myth #18: All insurance providers are the same. It doesn't matter who you buy your insurance from

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This misconception could cost you money, service and protection. Buying insurance is a much different process than going to the grocery store to purchase items like milk or eggs. There are three different sources for insurance, and your choice of provider makes a big difference. You want help when it counts the most!

1. Independent Insurance Agents - Represent a number of insurance companies and research with these firms to find you the best combination of price, coverage and service. Some agents represent more insurance companies than others. Be sure to ask.

2. Captive Agents - Only represent one insurance company (why they are referred to as "captive"). They can only sell you insurance policies offered by the one firm they represent.

3. Direct Writers - Only represent their own company and insurance policies. Generally, insurance is only offered over the telephone or online, eliminating the possibility of meeting face-to-face.

Beyond options, it's also wise to consider the ongoing support you'll receive as your needs change and for possible future claims.

If you've heard any other potential insurance myths, please contact us at to allow us the opportunity to share them here. If you think these myths are interesting consider emailing them to a friend by clicking here.

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