Loading blog content, please wait...
By Matt Cole State Farm
# 5 Insurance Myths That Could Cost Franklin Families Thousands If you're like most homeowners in Franklin, you probably don't think about your insuranc...
If you're like most homeowners in Franklin, you probably don't think about your insurance until you need it. And that's exactly when most people discover they've been operating under some dangerous assumptions.
These myths aren't just harmless misconceptions. They're financial landmines that can leave you scrambling when life throws you a curveball. Let's clear up the confusion so you can protect what matters most.
This one catches people off guard more than any other myth, especially when they're filing a claim after a bursting pipe or storm damage.
Your standard homeowners policy does cover your belongings, but there's a catch. Most policies cap coverage for certain items like jewelry, art, collectibles, and electronics. That engagement ring you inherited? Your collection of vintage guitars? Your high-end camera equipment? They're likely underinsured.
Even more surprising, some policies distinguish between different types of damage. Your furniture might be fully covered after a fire, but electronics damaged by a power surge could be a different story. Water damage gets particularly complicated, with different coverage depending on whether it's a sudden pipe burst versus gradual seepage.
The fix is simple but requires action. Review your policy and add scheduled personal property coverage for valuable items. Take photos of your belongings and keep receipts. It feels tedious until the moment you need to prove what you owned.
Here's the thing about "full coverage"—it's not actually an insurance term. It's marketing language that's created a lot of confusion and false security.
What most people mean by full coverage is having both collision and comprehensive insurance along with their liability coverage. That's great, but it doesn't mean every possible scenario is covered. Your policy likely has gaps you've never considered.
Rental car reimbursement while your car is in the shop? That's usually optional. Coverage for custom parts and equipment you've added to your vehicle? Also optional. Gap insurance to cover the difference between what you owe and what your car is worth after a total loss? You guessed it—not automatic.
And here's one that surprises Franklin families with multiple drivers: if you let someone borrow your car and they cause an accident, your insurance is primary. Their insurance might kick in as secondary coverage, but your rates could take the hit.
Take an hour to actually read through your declarations page. Look for what's excluded, not just what's included. Ask about coverage options you might have declined when you first signed up, especially if your life has changed since then.
Your employer-sponsored life insurance is a fantastic benefit. It's usually free or low-cost, and it provides valuable protection. But treating it as your complete life insurance solution is like treating the spare tire in your trunk as a permanent replacement for your regular tires.
Most employer policies provide coverage equal to your annual salary, maybe twice that if you're lucky. For a young family with a mortgage, childcare costs, and future college expenses, that's probably not going to cut it. Think about what your family would actually need to maintain their lifestyle, pay off debts, and cover future expenses without your income.
The bigger problem? That coverage disappears when you leave your job. And if you wait until you're older or develop health issues before getting your own policy, you'll pay significantly more or potentially become uninsurable.
Here's the approach that makes sense: keep your employer coverage as a foundation, but add a personal term life insurance policy that actually matches your family's needs. You'll lock in lower rates while you're younger and healthier, and you'll have coverage that moves with you regardless of job changes.
Umbrella insurance has a branding problem. The name makes it sound like something only country club members need to protect their yacht and vacation homes.
The reality? Umbrella coverage is one of the most affordable ways to protect everything you've worked to build, and you don't need to be wealthy to benefit from it. You just need to have assets worth protecting and exposure to potential liability.
Think about common scenarios in Franklin. You're hosting a graduation party and a guest trips on your deck stairs, suffering serious injuries. Your teenager causes a multi-car accident while texting. Your dog bites a neighbor's child. Someone slips on your icy driveway during one of our winter storms.
Your auto and home insurance policies have liability limits, and they're probably lower than you think. Once those limits are exhausted, your personal assets are on the line—your savings, your home equity, future wages.
Umbrella coverage kicks in when your other policies max out, providing an additional layer of protection. It also covers situations that your standard policies might exclude, like certain types of personal injury claims.
If you own a home, have meaningful savings, or have teenage drivers in your household, umbrella coverage deserves a serious look. It's designed for regular families who have something to lose, not just the ultra-wealthy.
Insurance companies love promoting bundle discounts, and to be fair, bundling can definitely save you money. But the keyword is "can," not "will."
The myth is assuming that bundling automatically gives you the best deal. Sometimes it does. Other times, you're leaving money on the table because you haven't shopped around.
Here's what happens: you get a discount for bundling your home and auto insurance with one company. That discount feels good. But what if another company's base rates for your home insurance are so much lower that even without a bundle discount, you'd save more? What if a different insurer specializes in auto coverage for your specific situation and offers better rates?
The bundle discount can also create complacency. You stick with one company for everything, even as your needs change and better options emerge. You might be getting a discount on overpriced coverage.
The smarter approach is to periodically compare your bundled rate against what you'd pay by splitting your coverage between different insurers. Look at the total annual cost, not just the percentage discount. Factor in the coverage quality and customer service reputation, not just price.
Sometimes bundling is absolutely the best choice. Sometimes it's not. The only way to know is to actually run the numbers.
These myths persist because insurance is complicated and most of us would rather think about almost anything else. But taking the time to understand what you actually have—and what you actually need—can prevent devastating financial surprises.
Review your policies with fresh eyes. Ask questions about anything that's unclear. Consider how your coverage aligns with your current life situation, not the situation you were in when you first bought the policy.
Your insurance should give you peace of mind, not a false sense of security. Make sure you're building protection on solid ground, not common misconceptions.