Ceri Austin 
There are few subjects more intimidating than insurance, but the proliferation of misconceptions is also a temptation for consumers. If you believe some of these myths, you stand to lose money and also to be financially exposed and inadequately protected against possible danger.
There are a lot of myths floating around when it comes to insurance. Generally, separating fact from fiction will help you better plan for the future when it comes to your finances. We put together some common myths about car, home and life coverages below.
Car Insurance Follows the Driver
The single most commonly asked question about car insurance is whether it covers the driver of the car or the actual car. The answer, as is typically the case with insurance policies and state laws, depends on the terms of the policy. Since this coverage follows the driver, not the car, that same provision is likely honoured even if the individual uses someone else’s car and causes an accident. But in most cases, full and collision coverage follows the car. This means that full coverage is what most lenders and leasing companies require when you finance or lease a vehicle. If there are people in your home who drive your cars with some regularity, then it is a good idea to add them to the policy – auto policy or personal umbrella (discussed below) – to make the coverage more affordable than if the named excluded driver are added to the existing policies, and the cost of coverage is competitive with the non-owners car policy. Non-owners car policies can be written for any car driven by that named excluded driver as long as the driver has permission to use the car. There is another alternative to named excluded drivers, and that is a personal umbrella policy. The insurance market provides the option of a policy that covers anyone driving the car who does not have coverage, but this would be unavailable to named excluded drivers on an auto policy. The personal umbrella policy then becomes the best choice. It functions as an excess liability policy, exceeding the liability limits on one or more auto policies, home-owners policy, etc, by the limits of the umbrella policy with premiums considerably less than adding the drivers to the existing policy or policies.
Homeowners Insurance Follows the Homeowner
While homeowners insurance is not technically legally required, most mortgage companies or co-op boards (if your property is financed or owned by a group) with a financial interest in your property legally require it. Finally, your home is often your biggest asset and financial security should come first, especially when you’re buying one – not to mention, it’s a requirement when living in a condo or co-op, which can increase your premiums significantly when adding hazards such as pools, for example.
Health Insurance Follows the Person
Without it, people and families are no longer financially ruined by exorbitant medical bills – but many families can’t afford health insurance alone. Bloomberg is following 12 families in the US who earn less than $150,000 a year and buy insurance in the individual marketplace, despite being on a budget; its intent is to understand how families pay for health insurance premium payments for individual plans in the individual marketplace and make trade-offs between those payments and other expenses such as grocery or clothing expenses; why it’s important to have insurance, in the case of illness or injury.
