Men may be more gullible when it comes to insurance myths than women but even women think a number of popular myths about insurance are true, according to a survey by online insurance seller insure.com.
Insure.com said it recently surveyed 2,000 adults, half women and half men, from all regions of the country, asking them whether 10 insurance-related statements were true or false. All the statements were false, according to the online insurance provider.
More than half of people surveyed (52 percent) have a misunderstanding of how to insure a house. Most believe a house should be insured for its real estate market value whereas insuring a house based on the cost of reconstruction is the recommended route.
Insure.com also looked at who is more likely to believe a myth – men or women. In all cases except two, men were more likely to be duped by an insurance myth.
In one exception, women were more likely than men to erroneously believe that red cars cost more to insure than other cars, due to the perception that they get ticketed more. But insurers do not use car color as a factor in setting rates.
“I hope no one passed up the red Miata they really wanted because they thought the insurance would be more expensive,” said Amy Danise, editorial director of Insure.com.
In the other exception, the 44 percent of people who think an insurance company will cancel their car insurance right after they get in a bad accident were evenly split between the sexes.
The biggest disparity between men and women involved the myth that out-of-state speeding tickets can’t follow the violator home. They can follow the driver, and can lead to a rate increase depending on the insurance company, according to insure.com. Men were far more likely to think that speeding tickets can’t follow them home (66 percent) than women (34 percent).
Below are 10 insurance myths, with the realities and comments provided by insure.com, and the gender breakdown of those who believe the myths are true.
Myth 1: I should buy insurance coverage for my house based on its real estate market value.
- 52% think it’s true (45% women, 55% men).
- Reality: Buy coverage based on a home’s cost to reconstruct (materials and labor).
Myth 2: Red cars cost more to insure because they get pulled over for speeding more.
- 46% think it’s true (52% women, 48% men).
- Reality: Car color doesn’t affect insurance rates.
Myth 3: If I cause a crash with extensive damages to others, my auto insurance company can cancel me immediately.
- 44% think it’s true (50% women, 50% men).
- Reality: If an insurer wants to drop a customer due to claims, it generally has to wait until the policy period is up.
Myth 4: Small cars are the cheapest to insure.
- 40% think it’s true (42% women, 58% men).
- Reality: Small and mid-size SUVs and minivans are generally the cheapest to insure. Small cars are not, often because they’re chosen by more inexperienced drivers who tend to make claims, and because passengers incur more expensive injury claims.
Myth 5: The Affordable Care Act (also called Obamacare) allows health insurance companies to base rates on medical conditions such as high blood pressure, heart disease and cancer.
- 36% think it’s true (42% women, 58% men).
- Reality: It’s just the opposite – the Affordable Care Act prohibits health insurers from basing rates on pre-existing conditions.
Myth 6: Comprehensive auto insurance covers everything and anything.
- 32% think it’s true (41% women, 59% men).
- Reality: Comprehensive coverage is tragically misnamed. It covers only narrow portions of possible problems, including car theft, storm damage, animal collisions and vandalism.
Myth 7: Thieves prefer to steal new cars.
- 29% think it’s true (42% women, 58% men).
- Reality: It’s more lucrative to steal old cars and sell them for parts.
Myth 8: If my friend borrows my car and crashes it, their insurance will pay for damage.
- 25% think it’s true (48% women, 52% men).
- Reality: You and your insurance are on the hook when someone else drives your car.
Myth 9: The Affordable Care Act (also called Obamacare) requires me to take the health insurance plan offered by my employer.
- 19% think it’s true (41% women, 59% men).
- Reality: The Affordable Care Act requires almost all Americans to buy health insurance but doesn’t say where they must get it.
Myth 10: Out-of-state speeding tickets can’t follow you home.
- 13% think it’s true (34% women, 66% men).
- Reality: Oh yes they can.
“These misunderstandings can lead to financial loss,” said Danise. “We hope the survey results open people’s eyes to their true risks and insurance gaps.”
Insure.com sells auto insurance, home insurance, health insurance, and life insurance online.