Halloween is a time of witches, ghosts, goblins, scary stories and nightmares. As boring as they may be, insurance agents have nightmares too. So, in the spirit of Halloween I share three myths that I hear on a regular basis that give me the chills and nightmares is the same way your favorite scary movie does.

1. It will never happen to me – Then why buy insurance? We buy insurance for protection against the claims that may come. I am certainly not a proponent of purchasing insurance you don’t need, but it does make sense to play the what if scenarios. What happens if you don’t have “full coverage” on your vehicle and someone that doesn’t have insurance hits you. Can you afford to replace it? Do you have another vehicle you can drive? If the answers to these questions are no, then you might need to pay that little extra for the comprehensive and collision coverage (the actual name of full coverage), with rental coverage.

If it will never happen then the coverage will be really, really cheap because the cost of your insurance policy is literally                  based on what the insurance company expects to payout for you that year. No, you won’t have a claim every year, but                    when you do it’s also likely to be more that what you have been paying for the last several years.

1. I think it’s covered, so it is, right? WRONG! Insurance is a contract of adhesion. That is the legal term for take it or leave it. Insurance is filled with exclusions and limitations, and when you sign that contract it means you accept the terms as set forth by the insurance company. While we try our best to notify you of the big exclusions, the contracts and “fine print” can take forever to go through. So, here are a couple I would like to point out on different policies:
2. 1. Homeowners Insurance doesn’t cover Flood – yes there are water claims that can be covered, I am talking the rains come down, the floods come up, some through your front door. You can purchase this, but it is a separate policy.
3. 
   1. Homeowners Insurance doesn’t cover earthquake – Again this can be purchased, but it’s not automatically included, but rather is automatically EXCLUDED.
   2. Liability coverage doesn’t provide physical damage coverage for your vehicle. In Arizona if you have liability only, the other party is at fault, and doesn’t have insurance, your policy will not pay to replace your vehicle. In some states there is something called uninsured motorist physical damage, so if you get hit by someone that doesn’t have insurance you can get your vehicle repaired. Arizona is not one of these. If you don’t have comprehensive and collision coverage, we will not repair your car if the other party doesn’t have insurance.
   3. Wear and Tear is not covered on any insurance policy. Your car will get old, it will need oil changes, it will have flat tires we all know insurance doesn’t cover these things. But for some reason we don’t understand this concept when it comes to homeowner’s insurance, the same thing exists. We won’t cover wear and tear to your roof, AC units and other things around the house unless the cause of the loss is something else.

There are many more exclusions. These are the big ones. Refer to your policy as there are many more, but you can see                    why these things might cause nightmares.

3. There’s a grace period, right? – AAAAGGGHHHH!!! Yes, when it comes to auto payments there is a legal requirement for there to be a grace period for payments. In the state of Arizona, the rules state you have 7 days. How you run your finances is up to you, but what gives me nightmares about this line of thinking is that only applies to regularly scheduled payments, not renewals. So, at renewal if you don’t pay the policy doesn’t go into effect. Meaning you are left without coverage until you renew the policy. You can see why that might give me nightmares. People running around without insurance that think they do have insurance.

There are many more, but as professional worriers and risk managers being concerned about what’s going on and what’s covered and not covered is what we do. This is why at Gila Insurance Group we try to teach our clients about their options as they buy the policy so that surprises are limited when there is a claim, it’s up to our clients to decide how to best cover themselves armed with that knowledge. If you have questions about the insurance coverage you have with us, we are happy to answer questions you have. Knowing what to expect can be priceless. If you need to make changes to your policy please contact us today!