Insurance Myths Busted: What Your Uncle Joe Told You Isn’t True!

Well, well, well. Uncle Joe decided to roll up to Thanksgiving — all the way from Spokane, in fact. And guess what? He decided to get into an argument (diatribe? soliloquy?) after having to pay a ton of money out of pocket after he crashed his ’68 Mustang on 395 because he didn’t have enough auto insurance. And here’s the thing: Uncle Joe, while a man of worldly wisdom in some respects, should stay in his lane (both literally and with respect to this topic) because he has no clue about how insurance actually works. 

We all have an Uncle Joe in our lives, and that’s why this guide will help you separate truth from fiction when it comes to insurance myths — whether that’s about auto or homeowners insurance. 

Myth 1: Life Insurance Is Only for the Elderly 

“Do you need life insurance? Nah, you’re too young!” Um, no, Uncle Joe. Life insurance isn’t only for the elderly. In fact, it’s often better to have a term or whole life policy when you’re younger rather than older. Let’s think about it in simple terms. When you’re young, you typically don’t have as many assets, including real estate, equities, and bonds. Because of that, if you happen to meet an untimely demise sooner than later, any dependents in your life will be left in a more difficult financial situation. 

You also have to pay quite a bit more for your premiums as you get older. That’s because life insurance premiums scale exponentially with your age based on actuarial tables. Whether you opt for term or whole life coverage, you need this to protect your dependents while you’re young and healthy (unlike Uncle Joe, who is neither young nor healthy at this point — don’t buy into his life insurance myths). 

Myth 2: Health Insurance Isn’t Worth the Cost If You’re Healthy 

This one almost begs belief. “Healthy” is a very short-term state of affairs. Everyone gets sick, and almost everyone is going to deal with at least one chronic condition during their lifetime. Uncle Joe, when he’s not pounding brewskis in the backyard (what else is there to do anyway after crashing that Mustang), might be trying to convince you that this isn’t worth it since you’re still young and healthy. 

Again, it protects you against catastrophic outcomes. Let’s say you don’t have any health insurance whatsoever, and then you get into a car accident while going on a winery tour of Washington State with your “best friends.” The ambulance takes you to a hospital, which is obligated to provide emergency services to you by law. The only problem is that you have to pay out of pocket. And hospitals aren’t exactly known for charging low prices. So now you’re tens of thousands of dollars in the red, and you have no one to blame but Uncle Joe for some of the worst advice ever given. 

Myth 3: Home Insurance Covers All Natural Disasters 

Yeah, no. Uncle Joe decided to build a beautiful home in one of Washington’s most notorious flood zones. He decided not to check the flood map provided by the FEMA Flood Map Service Center (no surprise there when it comes to Uncle Joe — he’s not exactly known for his critical thinking skills). 

So, the answer is definitively “no.” Home insurance, by default, doesn’t necessarily cover every natural disaster known to mankind. Oftentimes, you might need to purchase additional protection from flooding, earthquakes, and other “acts of God” as they’re known in the business. 

Rather than trusting Uncle Joe with a matter like this, talk to your agent or consult the Home Insurance Decoder Ring instead to see what makes sense based on your risk profile rather than what Uncle Joe saw on Facebook the other day, alright? 

Myth 4: Auto Insurance Prices Are Solely Based on Driving Records 

Uncle Joe, the world’s “greatest” driver, loudly proclaims to you that the only thing that matters when it comes to saving money on your auto insurance premiums is your driving record. However, what affects car insurance rates goes far beyond how you drive.  

Factors like your age, location, and even the type of car you drive play a significant role. And while your driving record might be squeaky clean, Uncle Joe’s high premiums aren’t solely the result of his terrible driving record—or the ongoing myth, is it really more expensive to insure a red car? 

More auto insurance myths busted, once again. A lot of other factors affect your auto premiums, including: 

• Your Age: Teenagers tend to be riskier drivers — go figure. And because of that, insurers will often charge them more to insure them against that higher risk. 

• Where You Live: Your ZIP code also plays a role. Some areas in the country carry more risk for drivers than others, which means that if you’re more likely to run into a reckless driver like “Uncle Joe,” he’ll be both reckless and no longer “wreck-less.” 

• Your Vehicle: This one’s pretty simple. The type of car you drive often affects the exact rate you’re going to pay. And you might save money if your vehicle has additional safety features and anti-theft protections! 

• Your Credit Score: In some states, your credit score is considered. Washington is one of those states: In late 2022, a court issued an order overturning a prior ban on the use of credit scores to calculate rates. 

• Your Claims History: Your history of claims can impact your rate. Roughly speaking, more claims will mean higher costs for you. 

Myth 5: Renters Don’t Need Insurance 

While not legally required, you’re going to want a renters policy for a variety of reasons. That’s because most of the time your landlord is going to require coverage, it protects your belongings, and it saves you a boatload of cash in the event you have liability for an injury in your home. Depending on the policy, it can also cover backup living situations if your primary home is damaged or temporarily uninhabitable. 

Uncle Joe sure wishes he had renters policy the time someone had an unfortunate accident while playing beer pong at his “Crash Pad.” Don’t buy into his renters insurance myths either, okay? 

Myth #6: Motorcycle Insurance Is Just Like Auto Insurance 

Uncle Joe loves his Harley, but if he’s telling you motorcycle insurance is the same as auto insurance, he’s way off the mark. While both policies protect you and your vehicle, motorcycle policies come with unique considerations that every rider needs to know. 

For starters, motorcycles are inherently riskier than cars. Riders are more exposed to injury in accidents, so medical coverage and liability are especially critical. Unlike auto policies, many motorcycle policies allow you to add gear protection, which covers your helmet, jacket, gloves, and other riding equipment in case of an accident or theft. 

Also, standard motorcycle policies often don’t include coverage for customization. If Uncle Joe has poured thousands into chrome upgrades, custom paint, or aftermarket modifications, he’ll need to ensure his policy includes optional coverage for those extras. 

Finally, motorcycles face different theft risks. Bikes are easier to steal than cars, and comprehensive coverage is a must if you want to protect against theft or vandalism. 

Bottom line: Motorcycle insurance isn’t one-size-fits-all. Riders should speak to an agent about coverage tailored to their specific needs. Don’t let Uncle Joe’s highway wisdom steer you wrong — because what works for his truck won’t cut it for his hog. 

Myth #7: All Insurance Companies Are as Awesome as Vern Fonk 

Nope, nope, nope. Most insurers can’t hold a candle to us at Vern Fonk. As you’ve learned in this guide, these products can be a complicated beast, but a good agent can help you figure out exactly what products make sense for your specific needs. We’re here to help you deal with all the Uncle Joes in your life, so give us a call at (800) 455-8276, get a quote online, or visit one of our offices in your neck of the woods today!