Insurance Facts

There?s always an excuse for not having enough insurance, whether it?s on your health, life, car or your home. In these tough times, many say that it?s simply a matter of not being able to afford insurance. When it comes to insurance, however, ignorance is not bliss. What you don?t know ? or think you know that isn?t so ? could lead to financial disaster. Take this true-or-false quiz from MetLife Auto and Home. Answers are below.?
1. If my new car is totaled a few weeks after I purchase it, my insurance will cover full replacement cost.

If my car is in an accident, my insurance will cover all the repairs.

If my new car is totaled, my insurance will pay off the balance of my loan.

4. If my iPhone or MP3 player is stolen from my car, my auto insurance will pay for a replacement.

My auto insurance or credit card covers all the costs if I have an accident in a rental car.

My homeowners insurance covers all the costs of rebuilding after a fire.

My homeowners insurance will cover my children at college if they live on campus.

My homeowners insurance covers windstorm, hail, floods and earthquakes. (Hint, this is a trick question!)

Insurance policies are pretty standard from one company to another, so the only thing to compare is cost.

I last talked with my insurance agent within the past 18 months to update my policy.

?????? Here are the answers from MetLife:?

1. Under most policies, if your new car is totaled, your auto insurance will pay only a depreciated amount ? unless you have ?replacement cost? to cover a limited period and limited mileage in which you will be fully reimbursed to get a new car.

Don?t count on full payment on all car parts in an accident unless you have purchased an enhanced policy that specifically provides for coverage for parts such as tires, batteries, brakes, shocks and steering components. Otherwise, they may be paid on a depreciated value if they are older and worn.

If you have a loan on a car that is totaled, your loan amount may exceed the value of the car because of depreciation. Optional coverage known as loan/lease gap coverage is available for this situation.

The stuff you leave in your car is not covered by your auto insurance, but it is covered under your homeowners or renters insurance, subject to your deductible.

5. Your rental car damages may not be covered by all insurance policies. Expenses such as loss of use, diminished value of the vehicle and fees and charges are typically not considered covered expenses.

Your homeowners insurance should specify ?replacement cost? for both the structure and the contents. But if there have been building code mandates that require upgrade, such as a home sprinkler system or hurricane glass, those won?t be covered unless you have a specific rider called Ordinance or Law Coverage.

The parents? policy offers coverage, but the standard is typically limited to 10 percent of your total coverage and may only apply if your child is living on campus.

8. Here?s the trick in this question. Most standard homeowners policies do cover hail and wind damage. But they do not cover flood damage ? including backed-up drains from storms ? unless you have a separate flood policy available only through the National Flood Insurance Plan. Earthquake damages are excluded from almost all policies, although a rider may be available.

9. There are some basic standards for homeowners insurance policies, but they are by no means similar in every regard.

Everyone should do an annual review to make sure your current coverage meets your insurance needs.

For more details on these answers, go to the quiz at