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Top 8 insurance myths


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Illustration by John Corbitt

How to separate fact from fiction when it comes to your insurance.

By: Matt Hubert

There are a lot of misunderstandings about insurance floating around. Read on for answers to the most pervasive myths.

Myth: Your insurance premium shrinks as your vehicle gets older.

Most insurance companies haven’t taken a car’s age into account when determining auto premiums in years. One way to maintain cost-effective coverage is throughERIE Rate Lock®*, an extra coverage that freezes your auto premium year after year even if you file a claim. Your premium only changes when you add or remove a vehicle or a driver from your policy, change your primary residence and change your policy coverage or pay plan.

Myth: Only millionaires need an umbrella policy.

Even if your net worth doesn’t seem like much, a personal injury or liability lawsuit can wipe you out financially—and destroy any future earnings, too. Protect what you’ve worked so hard for with an ERIE Personal Catastrophe Liabilitypolicy. It provides an extra $1 to $5 million of liability protection in case you’re hit with a lawsuit that exceeds your homeowners or auto policies. And it’s more affordable than you might think.

Myth: Red cars cost more to insure.

Red is often associated with risk takers with a hankering for fast cars—but it’s the make, model and year of a car that really affect your premiums.

Myth: You don’t need a commercial insurance policy if you work from home.

Even cottage industries may need at least some form of property, liability, business vehicle and workers’ compensation insurance. Your ERIE Agent can give you a detailed idea of what level of protection you need.

(Sort of) Myth: If your house burns down, your insurance policy will give you enough money to rebuild it exactly as is.

Many insurance companies don’t offer Guaranteed Replacement Cost to cover the entire value of your home’s worth—or they’ll have a capped replacement cost that only replaces a certain percentage of the home’s value. Luckily, ERIE automatically includes it as a part of many of its homeowners policies.** (You can purchase an affordable endorsement for the policies that don’t include it.)

*Not available in North Carolina, Maryland and New York. Limited to three years in Virginia. ERIE Rate Lock® does not guarantee continued insurance coverage. Insured must meet applicable underwriting guidelines. Premium may change if you make a policy change. Patent Pending.

**Guaranteed Replacement Cost requires home improvements over $5,000 to be reported within 90 days. Coverage of costs to comply with laws or ordinances is subject to limits. Depreciation may be deducted until repair or replacement is made. Go to or contact your Agent for more information.

Posted 2:26 PM

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