Fact or Fiction?

When it comes to insurance coverage, don’t believe everything you hear. Knowing fact from fiction will help you choose coverage that’s right for you.

1. My auto insurance policy includes coverage for both personal and business use.
   FALSE
   If you are self-employed and use your car for business travel – such as operating a delivery service or providing transportation through a ride-sharing service – your personal auto insurance policy may not cover you. A commercial auto insurance policy provides coverage for business purposes. You may also have the option to purchase a supplemental insurance product that extends coverage for ride-sharing.
    
2. The color of my car affects my auto insurance rate.
   FALSE
   Car color does not affect your insurance premium. However, other factors – including a vehicle’s model, make, year, and the driver’s experience and driving record – may impact auto insurance rates.
    
3. Loaning my car to someone also means loaning my car insurance.
   TRUE
   In most states, car insurance follows the vehicle. This means your insurance company could be responsible for damages caused by someone else if they’re driving your car. Policies and laws differ by state, so make sure you understand the rules of the road before letting a friend drive your car.
    
4. I don’t need renters insurance. My landlord has coverage.
   FALSE
   Your landlord’s insurance only covers the building, not your personal property inside of it. A separate renters insurance policy is required to protect your personal belongings, as well as for protection against personal liability, such as a guest’s injury in your home.
    
5. My insurance policy acts as a product warranty.
   FALSE
   Your insurance policy is not a warranty. If your roof wears out, for example, your insurance policy will not cover repairs – unless it is damaged by a covered event.
    
6. My homeowners insurance doesn’t have to cover my property’s full value.
   TRUE
   It’s only necessary to cover the replacement cost of your home – not your property’s land. Be aware that some mortgage companies may try to require new homeowners to purchase insurance for the entire loan amount, which may be more than the replacement cost.
    

For more information about auto, home and other personal lines of insurance, call your AAA insurance agent or insurance customer service, or visit your local branch.

These tips are provided by the External Communications team at CSAA Insurance Group.