11th July, 2023

Insurance has been around for hundreds of years and, as with anything that’s been around that long, it’s bound to stir up a few misconceptions. So, we’ve rounded up a handful of myths to debunk. Are your possessions automatically covered away from home, and does the colour of your car really affect the premium? Keep reading to find out…

Myth:

“The colour of my vehicle will affect the price of my policy”

Fact:

We’ve all heard it before, “don’t get a red car, it will make your insurance more expensive!” – if only it were that easy. The truth is that, well, this isn’t quite true.

There are several aspects of your vehicle that will indeed affect the cost of your policy, such as the make, model, and engine size, but the colour makes very little difference.

However, if you decide to change the colour of your car after you’ve purchased it, then this – in most cases – would be considered a modification which can affect the price of your policy, so you do need to make your insurer aware.

Myth:

“Third-party cover will make my policy cheaper”

Fact:

Many drivers expect third-party cover to be cheaper than comprehensive because it only covers the costs of the third-party involved in an accident. However, in most circumstances this isn’t correct, with comprehensive cover often offering the cheaper rate.

Since there’s a higher demand for comprehensive cover, more insurers offer it so it’s easier to find it at a more affordable price. On top of this, third-party cover tends to attract drivers who are considered more high-risk, so the insurance provider will anticipate a higher likelihood of having to pay out.

Myth:

“Putting my insurance in my guardian’s name will make it cheaper”

Fact:

While this statement could technically (don’t do it) be true (we repeat: don’t do it) – this is in fact ‘fronting’, and it’s illegal.

According to Uswitch, a concerning 56% of young and first-time drivers believe that putting their insurance into the name of a more experienced driver will help to decrease the price. However, if you’re caught then not only will your insurance be invalid, but you’ll also risk points on your license, a driving ban, being fined and even ending up in court.

Instead, look into young drivers’ insurance and consider a black box.

Myth:

“I don’t need home insurance if I’m renting, the landlord will cover everything”

Fact:

While we’re sure it would be nice to have your personal belongings covered by someone else, this is not the case.

If you don’t have renters’ insurance and something were to happen within the building, such as a fire or flood, then the structure of the building may be covered by the landlord’s insurance, but your personal items would unfortunately not be protected.

Plus, if damages to your rental property or another tenant’s property were caused by something that was deemed your fault, such as an unsupervised candle that resulted in a fire, then you may find yourself liable for the damages – a hefty bill without the right insurance.

Myth:

“My possessions are automatically covered when I’m away from home”

Fact:

Picture this: you’ve convinced yourself to get back into running, so you treat yourself to a brand-new pair of wireless earbuds as motivation. Whilst you’re out on a run you realise one of your new earbuds is missing, but it’s okay because they’re covered by your home insurance, right? Wrong.

So, while you tell yourself that’s what you get for not staying in bed that Sunday morning, we’re here to tell you that’s what you get for not correctly checking your home insurance.

Not all contents insurance will cover your belongings outside the home, so you may need to purchase additional cover for this. When shopping around for your cover, be sure to read the documents carefully so you’re certain what’s included.

Myth:

“My life insurance will only pay out once I’ve died”

Fact:

While yes, the typical purpose of life insurance is to cover the costs that occur following the policies holder’s unfortunate death, many policies offer much more.

For example, some policies offer the likes of critical illness cover, which is designed to give you a sum of money in the event that you’re diagnosed with one of the specified conditions, so that you can work on improving your health without the dreaded financial worries.

Insurance is an incredibly important part of life that helps to make sure that you and your loved ones are protected, but it’s also important to know the facts before purchasing to ensure it’s the right cover for you. So, when you’re shopping around for you insurance, be sure to carefully read the policy documents – and don’t believe everything you hear.


Written by: Shannan Errington

*Please note that the above information has been gathered through secondary research. The information provided is not based on our opinion. You should seek further guidance and information before making an informed decision.

Sources:
https://www.cuvva.com/how-insurance-works/car-colour
https://www.uswitch.com/car-insurance/guides/car-insurance-myths/
https://www.otip.com/Why-OTIP/News/10-common-home-insurance-myths-debunked
https://www.johnlewisfinance.com/insurance/home-insurance/ten-home-insurance-myths.html
https://www.aviva.co.uk/insurance/life-products/life-insurance/6-myths-about-life-insurance/